China has unveiled a comprehensive plan aimed at accelerating the development of new quality productive forces, prioritizing innovation and industrial upgrading to sustain long-term economic growth. The guidelines, jointly issued on Friday by the Communist Party of China Central Committee and the State Council, emphasize the strategic integration of scientific and technological advances with industry, alongside enhanced institutional support.
The concept of developing new quality productive forces, introduced in 2023, is described in the document as both a necessary condition and a key focus for achieving high-quality development. However, officials acknowledge challenges in implementation, such as inefficient investment allocations, insufficient modernization of traditional industries, and a need for deeper reforms.
Officials from the National Development and Reform Commission (NDRC) underscored the importance of an innovation-driven approach, local adaptation of policies, and a phased transition strategy described as “establishing the new before abolishing the old.” The plan outlines 19 specific measures across five key areas, with technological innovation as the cornerstone.
Central to the strategy is promoting “original and disruptive innovation” and expediting the commercialization of research outcomes. The private sector is expected to play a leading role, with corporate research and development (R&D) spending projected to exceed 77 percent of total national R&D investment by 2025—levels comparable to those in developed economies. To bolster this, the guidelines propose establishing a corporate R&D reserve system, increasing additional tax deductions for eligible R&D expenditures, and formally designating select corporate R&D projects that align with national strategic priorities as national projects.
Economists and analysts have responded positively to these measures. Li Chao, chief economist at Zheshang Securities, suggested that the additional tax deduction rate for technology firms could be raised from 100 percent to 120 percent. Fu Yifu, a researcher at Jiangsu Su Merchants Bank, noted the shift signifies a transition from government-led to business-led allocation of innovation resources.
In addition to fostering emerging industries, the plan highlights the modernization of traditional sectors through digital, smart, and green technologies. The push includes promoting new pillar industries and creating mechanisms to support sustained investment growth while sharing risks in future-focused sectors.
A notable priority is the advancement of the “AI Plus” initiative, designed to broaden artificial intelligence applications across various industries. The guidelines also call for the establishment of robust systems for technology monitoring, risk warnings, and emergency response to ensure AI development remains safe, reliable, and manageable.
Institutionally, the plan emphasizes patient capital for early-stage technological ventures and encourages qualified technology companies to pursue stock market listings. Openness is another key element, with the guidelines supporting greater participation of foreign venture capital and the development of global innovation networks.
Kilian Aviles, executive vice-president of Dekra and head of its Asia-Pacific operations, cited China’s progress in AI, digital, and green technologies as a foundation for the company’s ongoing expansion within the country. He noted that China’s technological capabilities also facilitate the transfer of proven solutions to wider markets across the Asia-Pacific region.
The guidelines mark a strategic effort to reinforce China’s position as an innovation-driven economy amid a shifting global landscape.