China rolls out measures to further support foreign-funded R&D centers

China recently introduced a series of measures encouraging foreign investors to establish research and development (R&D) centers in the country.

A recent policy document released by the Ministry of Commerce and the Ministry of Science and Technology (MOST) outlined 16 measures to strengthen support for foreign-funded R&D centers.

This photo taken on July 4, 2022 shows a workshop of the Volkswagen Anhui MEB (Modular Electric Drive Matrix) plant under construction in East China's Anhui province. (Photo/Xinhua)

“The measures are practical and effective tools for helping foreign-funded R&D centers develop in China,” said Chen Chunjiang, assistant minister of commerce.

For example, the measures allow teams to apply for work permits and work-related residence permits in groups, promote the facilitation of cross-border collection and payment of funding for overseas talents, and encourage financial institutions to provide financial support for scientific and technological innovation as well as basic and cutting-edge research in foreign-funded R&D centers.

In terms of optimizing services for scientific and technological innovation, the measures stipulate that China will provide better guidance for foreign-funded R&D centers that apply for identification as high-tech enterprises, and offer more efficient and targeted services for the establishment and operation of foreign-funded R&D centers.

China will support the use of large scientific apparatus, scientific and technological reports and related data in accordance with the law, which will provide foreign-funded R&D centers with a solid underpinning for basic research and key, generic technology R&D.

Relevant departments will encourage national high-tech zones and national independent innovation demonstration zones to provide sound policy support and services for land, industry and talents, and a business-friendly and liveable environment for greater development of foreign-funded R&D centers.

“China will support the development of foreign-funded R&D centers with intensified efforts and more concrete measures, and encourage the establishment of more foreign-funded R&D centers in high grounds of innovation such as Beijing, Shanghai, the Guangdong-Hong Kong-Macao Greater Bay Area, the Chengdu-Chongqing economic circle, Wuhan city and Xi’an city,” said Wu Jiaxi, deputy director-general of the Department of Research Commercialization and Regional Innovation of MOST.

A large number of foreign-funded R&D centers have grown rapidly in China, particularly in the international sci-tech innovation hubs of Beijing, Shanghai and the Guangdong-Hong Kong-Macao Greater Bay Area, Wu added.

Shanghai added 25 foreign-funded R&D centers in 2022, bringing the total to 531. Last year, 29 foreign-funded enterprises, including Intel, AstraZeneca and Hitachi were included in the first batch of foreign-funded R&D centers.

Foreign-funded R&D centers have helped attract and bring together high-end innovation elements. They serve as important platforms for foreign-invested enterprises to attract and gather high-end talents at home and abroad. From 2012 to 2021, R&D investment in foreign-invested industrial enterprises above designated size increased from 176.36 billion yuan (about $26.02 billion) to 337.74 billion yuan, up 91.5 percent.

These centers have played a leading role in promoting high-level innovation activities. With their strong innovation capability in basic and cutting edge sectors, they have helped foreign enterprises deliver high-quality innovation results, and encouraged innovators in China to step up the pace of R&D innovation. From 2012 to 2021, the number of valid patent holdings of foreign-invested industrial enterprises above designated size increased from 68,000 to 241,000, up 255.2 percent.

In addition, they have contributed to mutual learning and connection between innovation networks in and outside of China. In recent years, China has accumulated a number of high-level foreign-funded R&D centers in information, biomedicine, new materials, new energy and other sectors, which has facilitated the country’s integration into global industrial and innovation chains.

“Foreign-funded R&D centers are an important part of China’s scientific and technological innovation system, which has not only contributed to introducing international cutting-edge technologies and high-end talents, and improving industrial technologies and abilities for scientific and technological innovation, but also effectively promoted the rapid development of global industrial and innovation chains,” Chen said.

According to a survey recently conducted by the China Council for the Promotion of International Trade, which covered over 160 foreign enterprises and foreign chambers of commerce in China, 99.4 percent of the respondents said they were more confident in China’s economic development in 2023, and 98.7 percent would maintain and expand their investment in China.