Template

Beijing — For the C-suite navigating the world’s second-largest economy, the word “template” has taken on a
new weight. In boardrooms from Shanghai to Shenzhen, executives are discovering that the old playbook for doing business
in China has been replaced by a more sophisticated, technology-driven framework. This is not merely a policy pivot; it is
a structural recalibration — one that demands a fresh strategic template for market access, compliance, and long-term
growth.

China’s economy grew 5.2% in 2024, reaching a nominal GDP of ¥126.06 trillion (approx.
US$17.5 trillion), according to the National Bureau of Statistics. But beneath the headline number lies a deeper
transformation. The government’s embrace of xīn zhì shēng chǎn lì (新质生产力 — “new quality productive
forces”) signals a shift from volume-driven expansion to innovation-led productivity. For foreign executives, this
represents both a challenge and a gateway: the rules of engagement are being rewritten, and those who adapt quickly will
capture the next wave of value.

1. The Macro Context: A New Growth Template

China’s economic planners have moved decisively away from the high-debt, real-estate-dependent model that defined the
pre-2020 era. The new template rests on three pillars: technological self-reliance, green
transition, and high-quality consumption. In 2025, R&D spending reached 2.68% of
GDP (approx. ¥3.4 trillion), up from 2.64% in 2024, with particular emphasis on semiconductors, AI, quantum
computing, and biotech.

Premier Li Qiang’s Government Work Report (zhèng fǔ gōng zuò bào gào, 政府工作报告) in March 2025 reinforced that
“modernising the industrial system through new quality productive forces is the core task.” Foreign executives should
understand that this is not a short-term slogan — it is a resource-allocation template that will shape tax incentives,
land-use policy, and state-guided investment funds for the remainder of the 14th Five-Year Plan (2021–2025) and into the
15th (2026–2030).

While FDI inflows have moderated — partly due to geopolitical friction and global capital reallocation — the
composition of foreign investment is upgrading. According to the Ministry of Commerce (shāng wù bù, 商务部),
investment in “high-tech industries” now accounts for 37.2% of total utilised FDI, up from 34.5% in 2023.
For executives, this means that generic manufacturing or assembly operations face headwinds, while projects aligned with
digitalisation, green energy, and biomedical R&D receive streamlined approvals and, in some cases, generous subsidies.

2. Regulatory Reset: The Compliance Template Hardens

Foreign executives often cite regulatory unpredictability as a top concern. In 2025, China is moving toward a more
codified — though still demanding — compliance environment. The Foreign Investment Law (wài shāng tóu zī
fǎ, 外商投资法) continues to provide a basic framework, but the real template is being written through sector-specific
rules: data security, cross-border data transfer, technology export controls, and anti-monopoly enforcement.

The Measures for Security Assessment of Cross-Border Data Transfers, revised in November 2024, now
offer clearer thresholds for when a security assessment is triggered. Companies transferring “important data” — defined
more narrowly than before — must still undergo review, but routine business data (e.g., HR records, supply-chain
logistics) below 1 million individuals’ personal information per year can be handled via a standard
contract. This is a meaningful improvement for multinational firms with regional hubs in Shanghai or Guangzhou.

Meanwhile, the Anti-Monopoly Law (fǎn lǒng duàn fǎ, 反垄断法) amendments, fully enforced since early
2025, introduce a “safe harbour” for