Boosting Foreign-Invested R&D Centers: Spotlight on China's New Measures

China's Ministry of Commerce and Ministry of Science and Technology, in a display of commitment to innovation and foreign investment in Research and Development (R&D), issued the "Measures for Further Encouraging Foreign Investment in Establishing R&D Centers" (the Measures) on January 11, 2023. This move particularly bolsters R&D activity within major technological innovation hubs.

Exploring China's R&D Landscape
China's drive for innovation has spurred a surge in foreign-invested R&D centers nationwide. Hotspots such as Beijing, Shanghai, and the Greater Bay Area feature prominently in this expansion. Shanghai alone is home to 531 foreign-invested R&D centers, with a notable addition of 25 establishments in 2022. Predominant sectors include biomedicine, information technology, auto parts, and chemicals.

Shanghai promotes three types of R&D centers with supportive policies around customs, financial aid, talent acquisition, academia-industry collaborations, intellectual property protection, and tax incentives:

• Foreign-Invested R&D Centers: These should be foreign investment enterprises, investing at least $2 million in R&D with clear objectives, specific projects, fixed premises, and necessary equipment.
• Global R&D Centers: Besides meeting the above criteria, these centers should be recognized by parent companies as top-tier global R&D centers, undertaking global R&D projects and investing at least $10 million in R&D.
• Foreign-Invested Open Innovation Platforms: These platforms should invest at least $2 million, house at least 10 signed and settled R&D projects, and possess a 1,000 square meter R&D premises, necessary facilities, equipment, and international expert guidance.

Key Takeaways from the New Measures
To bolster support for foreign-invested R&D centers and provide foreign investors with better access to China's development opportunities, the Measures propose 16 policies across four key areas:

1. Promoting Scientific and Technological Innovation: Improved guidance and services for new and high-tech enterprises' accreditation, and application process. Foreign-invested R&D centers will be supported to participate in national science tasks and major projects.
2. Enhancing R&D Convenience: Streamlined procedures for outward Intellectual Property Rights transfer, technology import/export, and customs clearance for research supplies while ensuring secure and orderly R&D data flow.
3. Facilitating Overseas Talent Acquisition: Work permit or residence permit applications are now expedited, with local authorities encouraged to provide support for high-end and urgently-needed talent in terms of housing, education, employment, and medical insurance.
4. Boosting IPR Protection: Clearer protection of trade secrets, enforcement of legal responsibilities for infringements, and implementation of the punitive compensation mechanism.

In summary, the Measures signal China's intention to further integrate foreign-invested R&D centers into its innovative ecosystem. The supportive stance of local authorities combined with strategic measures promises a future of increased collaboration, innovation, and economic growth. This presents an excellent opportunity for foreign investors to partake in China's technological advancement.