Published by ChinaMNC · Heshan

China's New Push to Merge Tech Innovation with Industry: What Foreign Founders Need to Know

A practical breakdown of China's latest policy opinion on integrating scientific and technological innovation with industrial innovation, and what it means for foreign founders setting up or running a company in China.

Why This Policy Matters for Foreign Founders

China's central authorities have issued a policy opinion aimed at deepening the connection between scientific and technological innovation and industrial innovation. The document sets out objectives, working principles and a broad set of measures covering how research is organized, how results are commercialized, how companies participate, how talent is trained and how financing and market rules are shaped. For foreign founders building or operating a company in China, the direction of travel is worth understanding: the policy repeatedly emphasizes that enterprises should play the leading role in innovation, and it lists concrete mechanisms through which companies can engage with national programs, platforms and funding channels.

The Core Objective

The stated goal is to build an innovation system led by enterprises and coordinated among companies, universities, research institutes and other actors. The policy envisions connecting the full chain from research to industrial application, covering all fields and mobilizing all relevant factors, with supporting safeguards. It frames this as a pathway from scientific strength to industrial and economic strength, in support of high-level technological self-reliance and high-quality development.

Guiding Principles

• Read new trends in the technology and industrial revolutions accurately, and plan systematically and holistically.
• Balance the supply of technology with demand-side pull, deploying innovation chains around industrial chains and laying out industrial chains around innovation chains.
• Strengthen the enterprise's role as the main innovation actor, improve market incentives, and concentrate innovation resources in companies.
• Use reform to unlock innovation vitality and remove conceptual and institutional obstacles to integration.

What the Policy Says About Enterprises

Several measures speak directly to how companies can participate in and benefit from China's innovation system.

Participation in national programs

National science and technology programs are to become more oriented toward industrial application. Enterprise needs are to be solicited on a regular basis, and the number of experts from companies and venture investment institutions involved in drafting guidelines, project review and acceptance is to be reasonably increased. Companies are to be encouraged to lead projects, with mechanisms such as open calls for solutions, a "project owner" system, milestone management and phased funding. Acceptance is to assess technology through application and products through the market.

Company-led commercialization

For national science and technology projects with clear industrial application goals, enterprises are in principle to take the lead and drive commercialization. Universities and research institutes are encouraged to set up technology transfer offices or positions, and to license results to small and medium-sized enterprises on a pay-after-use basis. The policy also calls for a more integrated national technology market, more professional technology transfer institutions and a stronger corps of technology managers.

Support for different types of companies

• Private enterprises: the National Natural Science Foundation is to be piloted in opening to private companies, and the scope and scale of joint funds for enterprise innovation are to be expanded.
• State-owned enterprises: encouraged to establish R&D reserve funds that are separately accounted for, exempt from value-preservation assessment and subject to error-tolerance rules.
• Technology SMEs: encouraged to increase R&D spending, with a higher super-deduction ratio for R&D expenses.
• Leading and high-growth companies: mechanisms are to be improved for cultivating science and technology leading enterprises, high-tech enterprises, specialized and sophisticated "little giant" firms and manufacturing single-champion enterprises, as well as early-stage technology startups.

Access to platforms and infrastructure

The policy calls for improving access for enterprises to major national science and technology infrastructure, large research instruments and national science data centers. It also encourages companies to lead the construction of science and technology innovation platforms and bases, and supports large enterprises in opening R&D platforms, application scenarios and supply chains to smaller firms, including first trial and first use of innovative products from SMEs.

Priority Technology Areas

The document identifies fields where breakthroughs and industrial development are to be pursued. Foreign founders in these sectors should note the emphasis on application scenarios, commercialization and standards.

• Core technology bottlenecks: integrated circuits, industrial machine tools, high-end instruments, advanced materials and biomanufacturing.
• Strategic emerging industries: new energy, new materials and aerospace, with support for building clusters with local characteristics.
• Future industries: quantum technology, biomanufacturing, hydrogen and fusion energy, brain-computer interfaces, embodied intelligence and sixth-generation mobile communications, with exploration of multiple technology routes, typical application scenarios and viable business models.
• Traditional industry upgrading: major manufacturing technology upgrades, large-scale equipment renewal, industrial internet development, and an "AI+" initiative to apply artificial intelligence across sectors.

Scenario Opening and Market Access

The policy promotes demonstration of new technologies, products and scenarios, and encourages local governments to open application scenarios in government services, smart cities and rural construction, with better matching of supply and demand information. On market access, it calls for removing unreasonable barriers to innovative products, pilots to relax market access in new business forms and fields, exploration of a commitment-based entry system, regulatory sandboxes for new technology applications, and improved laws and ethical rules in frontier areas such as artificial intelligence and biotechnology.

Intellectual Property, Standards and Financing

The policy calls for stronger protection of trade secrets and intellectual property in new fields, benefit-sharing and risk-sharing arrangements in industry-academia-research cooperation, full implementation of the patent open licensing system, and better standard-setting for national and international standards in frontier areas. On financing, it envisions a technology finance system matched to companies' lifecycle needs, a role for the national venture capital guidance fund, government-backed and state-owned venture funds focusing on early-stage, small, long-term and hard-tech investments with longer assessment cycles and differentiated regulation, promotion of an innovation scoring system, a high-quality "technology board" in the bond market, and a science and technology insurance policy system.

Talent and Local Pilots

On talent, the policy encourages joint training between universities and enterprises, dual-mentor arrangements, flexibility for researchers to take secondments or leave to start businesses, and appointment of enterprise innovators as industry professors. It supports young scientific talent and the cultivation of technology entrepreneurs. It also encourages local governments to pilot deep integration reforms, with coordination between central and local authorities, and support for high-tech zones and innovation demonstration zones to trial policies first.

Practical Takeaways for Foreign Founders

• If your China entity conducts R&D, watch how enterprise participation in national programs and joint funds develops; eligibility and procedures will matter.
• Consider collaboration with universities and research institutes, especially where technology transfer, licensing and patent open licensing are involved.
• If you operate in a frontier or strategic sector, local scenario-opening programs and pilot market-access measures may create early opportunities.
• Keep intellectual property and trade-secret protections in mind when structuring joint development and benefit-sharing arrangements.
• Monitor local implementation, since many measures are to be carried out by provinces, zones and pilot regions.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.

Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a company in China.