Published by ChinaMNC ยท Yulin
China's New Push to Integrate Tech Innovation and Industry: What Foreign Founders Need to Know
A practical guide for foreign founders on China's latest policy to deepen the integration of technological and industrial innovation, covering business-led R&D, startup support, financing, talent, and market access.
Overview of the Policy
China's central authorities have issued a new opinion aimed at deepening the integration of technological innovation and industrial innovation. For foreign founders operating or registering a company in China, this policy signals how the government plans to align research and development with commercial application, and where opportunities may emerge for businesses that can contribute to that integration. The policy is framed as a whole-of-government effort to build a modern industrial system and develop new quality productive forces, with enterprises positioned at the center of the innovation system.
Guiding Principles and Working Approach
The policy sets out several working principles that shape how it will be implemented. It emphasizes systematic planning that responds to new trends in the technology revolution and industrial transformation. It calls for balancing technology supply with demand pull, arranging innovation chains around industrial chains and vice versa. It stresses strengthening the principal role of enterprises in innovation and improving market mechanisms that reward innovation. It also commits to removing ideological and institutional barriers that hinder deep integration of technological and industrial innovation.
Key Measures Relevant to Foreign Founders
1. Business-Led Task Organization
National science and technology programs will be oriented toward industrial application. Enterprise demands will be regularly collected, and experts from enterprises and venture capital institutions will be given a greater role in drafting guidelines, project evaluation, and acceptance. Companies are encouraged to lead projects through mechanisms such as open calls for solutions and milestone-based management with phased funding. Project acceptance will assess both technology application and market performance, integrating R&D and industrialization goals.
2. Faster Commercialization of Research Results
For national science and technology projects with clear industrial application goals, enterprises will generally lead implementation and commercialization. Universities and research institutes are supported to set up technology transfer offices, strengthen intellectual property and incubation services, and accelerate application through technology transfer, licensing, or equity investment. Reforms will grant researchers greater ownership of job-related scientific achievements and allow universities to license results to small and medium-sized enterprises on a pay-after-use basis. A unified national technology market and a professional technology transfer workforce will be developed.
3. Scenario-Driven Innovation
The policy promotes demonstration of new technologies, products, and scenarios. Local governments are encouraged to open application scenarios in government services, smart cities, and rural construction, and to publish supply and demand information for technology and scenarios.
4. Strengthening Key Technologies and Emerging Industries
Breakthroughs are targeted in integrated circuits, industrial machine tools, high-end instruments, advanced materials, and biomanufacturing. The policy also calls for cultivating emerging and future industries through original and disruptive innovation, including new energy, new materials, aerospace, low-altitude economy, quantum technology, biomanufacturing, hydrogen and nuclear fusion, brain-computer interfaces, embodied intelligence, and 6G. Traditional industries will be upgraded through manufacturing transformation, equipment renewal, industrial internet, and the "AI Plus" initiative.
5. Enhancing Enterprise Innovation Capacity
Enterprises will have a regular channel to participate in national science and technology strategy and policy-making. The National Natural Science Foundation is encouraged to open pilot programs to private enterprises, and enterprise innovation joint funds will be expanded. State-owned enterprises are encouraged to establish R&D reserve funds with independent accounting, exemptions from value-preservation assessments, and error tolerance. Small and medium-sized tech enterprises are encouraged to increase R&D investment, with a higher super deduction ratio for R&D expenses. Enterprises are supported to build innovation platforms, and national major scientific infrastructure and large research instruments will be opened to them. Talent programs and postdoctoral workstations will be strengthened in enterprises.
6. Cultivating Tech Enterprises
The policy aims to improve support for leading tech enterprises, high-tech enterprises, specialized and sophisticated "little giant" enterprises, and manufacturing single-champion enterprises. It encourages large enterprises to open R&D platforms, application scenarios, and supply chains to SMEs and to pilot their innovative products. Collaboration among large and small enterprises and across the industrial chain will be deepened.
7. Financing the Innovation Cycle
A science and technology finance system will be built to match the financing needs of tech enterprises throughout their life cycle. The national venture capital guidance fund will play a role. Government-funded and state-owned venture capital funds will focus on early-stage, small, long-term, and hard-tech investments, with long-cycle assessment, differentiated regulation, and exit mechanisms. The "innovation points system" will be promoted to quantitatively assess SME innovation capacity. A high-quality "tech board" in the bond market will be developed, and a science and technology insurance policy system will be established.
8. Talent Development and Use
Education will be aligned with technological and industrial needs, with enterprises and industry departments participating in adjusting academic disciplines. University-enterprise joint programs, work-study alternation, and dual-mentor systems will be promoted. Policies will support researchers taking temporary posts, part-time roles, and leaving posts to start businesses. Enterprises are encouraged to hire innovation talent as industry mentors and professors. Young scientists and tech entrepreneurs will be supported.
9. Innovation Platforms
The policy calls for coordinated development of national emerging industry innovation centers, national industrial technology engineering centers, national technology innovation centers, and national manufacturing innovation centers to supply key generic technologies. Concept validation centers and pilot testing platforms will be built to serve industrialization of new technologies. Local new-type R&D institutions will be supported.
10. Market Environment and Intellectual Property
Unreasonable barriers to market entry for innovative products will be removed, with pilot programs for relaxed market access and commitment-based entry in new business forms. New technology application regulation will explore "sandbox" approaches. Laws and regulations for frontier fields such as artificial intelligence and biotechnology will be improved, along with science ethics rules. Intellectual property protection will be strengthened, including trade secrets and new business forms. The patent open licensing system will be fully implemented, and standard layout for major national science and technology projects will be reinforced. National and international standards development in frontier fields will be strengthened.
11. Incentives and Evaluation
Tax incentives for technological innovation will be implemented. Due diligence exemption mechanisms and negative lists will be explored for technology commercialization and venture capital. The state-owned enterprise assessment system will be improved, with a higher proportion of joint R&D expenses with universities and research institutes treated as profit add-back. Industry-university-research cooperation and commercialization results will be key in evaluating research universities, institutes, and researchers.
12. Local Pilot Programs
Local governments are encouraged to pilot deep integration reforms based on their endowments. Coordination between central and local governments will be strengthened, including shared investment and joint implementation of major tasks. National high-tech zones and independent innovation demonstration zones will pilot policies. International and regional science and technology innovation centers and qualified localities will carry out reform pilots, build innovative cities, and create sources of original innovation.
Practical Implications for Foreign Founders
Foreign founders should note that the policy emphasizes enterprise-led innovation and commercialization. Companies with R&D activities in China may find more opportunities to participate in national programs, access open research facilities, and benefit from tax incentives and financing support. The focus on opening application scenarios and removing market entry barriers could ease market access for innovative products. The push for talent mobility and university-enterprise collaboration may help in recruiting researchers. However, the policy is a framework, and specific implementation will depend on local regulations and procedures. Foreign founders should monitor local pilot programs and consult professional advisors on how to align their business with these measures.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.