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China's New Policy to Deepen Integration of Tech and Industry: What Foreign Founders Need to Know
China has issued a new policy to deepen the integration of technological and industrial innovation. This article summarizes the key points from an official Q&A with the Ministry of Science and Technology, explaining how the policy may affect foreign founders operating or registering a company in China.
China's New Policy to Deepen Integration of Tech and Industry: What Foreign Founders Need to Know
On October 21, 2026, the General Offices of the Communist Party of China Central Committee and the State Council issued the Opinions on Promoting the Deep Integration of Technological and Industrial Innovation. A responsible official from the Ministry of Science and Technology (MOST) answered reporters' questions about the document. For foreign founders building businesses in China, this policy signals a strategic shift toward a more application-driven innovation ecosystem—one that could open new opportunities for collaboration, but also requires a clear understanding of the government's priorities.
Background and Significance
The policy builds on years of emphasis by the central leadership on integrating technological innovation with industrial development. According to the MOST official, scientific and technological innovation is seen as the "basic path" for developing new quality productive forces, and deep integration is considered key to leading that development through high-level technological self-reliance. The Fourth Plenary Session of the 20th CPC Central Committee incorporated this integration into the main objectives for economic and social development during the 15th Five-Year Plan period (2026–2030). The new Opinions are intended to provide a comprehensive strategic plan for this integration, with the goals of accelerating technological self-reliance, fostering new quality productive forces, building China into a technological powerhouse, and supporting Chinese-style modernization.
Overall Approach and Framework
The Opinions are a comprehensive document that sets top-level design for the integration, focusing on both goals and problems. It emphasizes developing new quality productive forces and building a modern industrial system as the overarching objectives, with a focus on constructing an industry-led, multi-stakeholder collaborative system for integrated innovation across enterprises, universities, and research institutes.
A key shift is the call to break away from the traditional mindset of "first produce results, then consider commercialization." Instead, technological innovation must be application-oriented, and industrial development must clearly define its technological tasks. The document addresses what to integrate, how to integrate, and who integrates, and proposes targeted policy measures.
The Opinions consist of eight parts: Part 1 sets overall requirements, Parts 2 through 7 outline key tasks, and Part 8 covers organizational implementation.
Key Measures for Foreign Founders
The policy specifies concrete measures in six areas. Below we summarize each and highlight implications for foreign founders.
1. Seamless Connection Between Innovation and Industrial Chains
Innovation and industry are seen as mutually reinforcing: technological innovation provides intrinsic momentum for industrial innovation, while industrial innovation creates value for technological innovation. Measures include:
- Improving coordination mechanisms for innovation;
- Reforming the way tasks are organized;
- Smoothing the pathway for commercializing scientific and technological achievements;
- Strengthening scenario-driven innovation.
Implication for foreign founders: If you are developing new technologies or products, you may find more support for piloting and scaling innovations through real-world application scenarios. However, expect greater emphasis on demonstrating clear market applications.
2. High-Quality Technology Supply to Support a Modern Industrial System
The policy aims to apply technological achievements to specific industries and industrial chains, thereby creating new industries and promoting deep industrial transformation. Specific measures include:
- Breaking through key core technologies to enhance the autonomy and controllability of industrial chains;
- Fostering emerging and future industries through original and disruptive technological innovation;
- Upgrading traditional industries with advanced technologies.
Implication for foreign founders: Companies in emerging sectors such as advanced manufacturing, green tech, or digital services may find alignment with national priorities. Traditional industries also offer opportunities for technology upgrading partnerships.
3. Strengthening Industry-Led Collaborative Innovation
Enterprises are considered the basic units of industrial development and the main force of innovation, serving as the link between innovation and industrial chains. The policy calls for reinforcing the principal role of enterprises throughout the integration process. Measures include:
- Comprehensively enhancing enterprise innovation capacity;
- Accelerating the cultivation and growth of technology enterprises;
- Strengthening coordination among innovation actors.
Implication for foreign founders: As foreign-invested enterprises, you are part of the enterprise ecosystem. You may benefit from programs that support enterprise innovation, but also face expectations to invest in R&D and collaborate with local universities and research institutes.
4. Improving the Efficient Allocation of Innovation Resources
The policy addresses systemic layout and optimized allocation of innovation resources, removing barriers to the smooth flow of innovation factors. It aims to promote a virtuous cycle among technology, industry, and finance, strengthen collaborative talent cultivation and utilization, and build integrated innovation platforms.
Implication for foreign founders: Access to talent, financing, and platforms may improve, but competition for resources could intensify as domestic innovation actors also benefit. Engaging with local talent pipelines and financial institutions will be important.
5. Fostering a Sound Ecosystem for Deep Integration
The policy combines effective markets with a proactive government, aiming to be both flexible and well-regulated. Measures include:
- Improving the market environment that incentivizes innovation;
- Strengthening intellectual property protection, utilization, and technical standards development;
- Improving innovation incentive and evaluation policies.
Implication for foreign founders: Enhanced IP protection is generally positive for foreign companies bringing proprietary technology to China. However, you should ensure your IP strategy is robust and aligned with local standards.
6. Expanding Space for Deep Integration
The policy supports local experimentation in deep integration, guiding regions to leverage their unique advantages to build technological strengths and industrial characteristics.
Implication for foreign founders: If you are deciding where to locate your China operations, consider regional innovation clusters that match your industry. Local pilot policies may offer incentives, but due diligence is needed to understand specific local requirements.
Implementation and Next Steps
The document concludes by calling on all regions and departments to implement the Opinions under the centralized leadership of the Party Central Committee, adapting to local conditions. For foreign founders, this means the policy will be rolled out through various local initiatives and pilot programs. Staying informed about local implementation details will be crucial.
While the policy does not directly address foreign investment, its emphasis on enterprise-led innovation, IP protection, and resource allocation creates a framework that will shape the business environment for all companies in China, including foreign-invested ones. Founders should monitor how these measures translate into specific regulations and support programs at the local level.
This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.
For personalized guidance on registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535.