It pledged to “accelerate the implementation of [China’s] innovation-driven development strategy”, “expand international science and technology exchanges and cooperation”, and “increase support for foreign investment in China to set up R&D centres to carry out scientific and technological research and innovation activities”.

‘Highly investible’ China woos foreigners but withholds what they want most

To improve foreign-invested R&D convenience, the statement said it will support legal cross-border R&D data flow. Relevant oversight departments will also “efficiently conduct outbound security assessments of important data and personal information to promote the safe and orderly free flow of R&D data”.

Supporting the freer flow of R&D data may help alleviate foreign investors’ concerns over the country’s tightening cybersecurity regulations and limitations on data flows.

Chinese authorities announced last month that they would strictly review data processing, cross-border data transfers, and merger-and-acquisition (M&A) activities involving foreign capital that could affect national security, as Beijing moves to safeguard what it considers sensitive information.

The measures also shed light on China’s bid to attract overseas talent by making it more convenient for them to work in the country.

Foreign-funded R&D centres will be allowed to apply, as a team, for a one-time work permit of up to five years, so as to facilitate the long-term residency of overseas talent in China.

“Green channels” will be set up for overseas high-end talent employed by foreign R&D centres. Restrictions will also be relaxed on qualifications, years of experience and other conditions, and it will be easier for foreigners to apply for senior titles.

More incentives, including for housing, children’s education, spousal employment and medical coverage, will also be available to qualified overseas talent, the statement added.

Talent has always been deemed critical to China’s economic competitiveness, but that need has become all the more pressing as the country emphasises self-sufficiency amid curbs on technological imports from the US.

But the new measures reflect how China is trying to appear open and collaborative to the outside world.

From January to November last year, China’s actual use of foreign investment amounted to US$178.08 billion, marking a year-on-year increase of 12.2 per cent, according to the Ministry of Commerce.

China will ‘exhaust all means’ to lure global talent, Xi says

China also intends to promote collaborative innovation between domestic enterprises, universities and research institutions. Wednesday’s statement said the Ministry of Education and other departments will “encourage educational institutions, research institutes and vocational schools to cooperate with foreign-funded R&D centres in technical research”, while also striving to ensure that intellectual property rights are protected on both sides.

The statement also said China will “encourage R&D centres and vocational schools to carry out technical collaboration, set up training bases, and build joint laboratories and other platforms for the innovation of technical skills”.

China’s annual research and development expenditures nearly tripled in the past decade, reaching 2.8 trillion yuan (US$414 billion) in 2021. And its spending is expected to have surpassed 3 trillion yuan in 2022, according to the official Xinhua.

The two ministries also vowed that financial institutions would be encouraged to offer financial support for innovation centres.