Did you know international teams can have access to a wide variety of China’s public non-equity R&D and innovation grants?
This means your innovative business or development project can potentially get the needed capital, despite the financial challenges the COVID-19 crisis may cause in your home country.
Over the last decades, numerous innovation funding programs have been initiated across China to promote innovation and entrepreneurship development, as well as to attract top talent both inside and outside the country.
However, the provided information on relevant funding is mostly in the Chinese language, making the grant opportunities unknown or inaccessible for the majority of international entrepreneurs and experts.
To help international companies and research teams better understand the free government grant opportunities and application practices, our Chinese consultants have looked closely into some reliable sources and will share some key findings in this blog.
1. Why choose Chinese innovation grants?
China is more than just a massive market. It is growing aggressively to be a major player and global partner in innovation development, both inside and outside the border. Leveraging the newly reformed national funding plan can bring you some significant benefits:
Easier access to favorable incentives and supporting policies for business development locally and globally;
Non-equity capital support ensuring your full control of your business;
Various types and levels of research/startup funding to choose from;
A reliable source of income as the grants are initiated and governed through public organisations;
Less competitive due to low international recognition. In the diagram below, under 5% of Jiangsu Province’s grant applications in 2018 were submitted by international applicants on average.
2. What kind of funding to choose?
The variety of public grants for innovative development might be overwhelming. Which kind of grant would be the perfect match for you? In this section, we will look into different administrative levels, funding types, and focused industries.
2.1 Administrative levels
China’s government grant administrations have been establishing a wide range of incentives and funding instruments to support the growth of innovative projects and enterprises.:
National level: this unified management structure overlooks all funding at the national level. The Ministry of Science and Technology (MOST) coordinates grant priorities, strategies, directions, and budgeting to prevent overlaps among ministries. Expert committees from the technical, industrial, and financial fields also regularly provide strategic advice for each funding plan.
Local levels: there is a wide range of subsidies and rewards are generously offered by provincial, municipal, or county/district administrations across China. Grants at the local level usually replicate the national-level structure. However, the degree of transparency and international participation of local-level grants in different regions may differ significantly.
Co-funding for international collaborations: a good example of this is The EU-China Co-Funding Mechanism (CFM). It is jointly initiated by the European Union and the Chinese government, aiming to support joint research and innovation projects between European and Chinese universities, research institutions and enterprises in strategic areas of common interest.
2.2 Funding types
The innovation grants designed for enterprises, research institutes, start-ups/SMEs, researchers, and universities are generally divided into the following main types:
National Natural Science Fund (China’s largest fund for basic research and applied research in natural sciences)
National S&T Megaprojects (addressing strategic products, technologies, and engineering tasks)
National Key R&D Program (supporting projects contributing to social welfare)
Technology Innovation Guidance Fund (to stimulate the transfer, capitalisation, and commercialization of scientific technology results)
Bases and Talents Program (supporting scientific research with international competitiveness, and the fostering of top-notch innovative talents and teams)
There are also grants to support commercialisation, technology transfers, applied researches, loans, innovation vouchers, and international cooperation.
2.3 Focused industries
Science and technologies drive economic development, and the Chinese government tends to prioritise prospective industries. As a result, if your business performs in the following focused industries, there will be higher chance to be admitted: environment and climate change, energy and resources, security, construction and architecture, medical and health, biotechnologies, pharmaceutical, automotive and new energy vehicles, ICT, new materials, transports and infrastructure, agriculture and food, artificial intelligence, science, and technology services.
3. Case study: Jiangsu Province’s “Double Innovation Plan”
3.1 Province overview
Jiangsu Province, with a 954 km coastline and close proximity to Shanghai, is one of the most economically developed regions in China. Some well-known cities in the province are Nanjing, Suzhou, Wuxi, Changzhou, Kunshan, and Nantong. Being highly industrialised and developed, it hosts a large number of economic zones for various sectors and enjoys vast foreign direct investments, international trades, and technological innovations.
3.2 What is the “Double Innovation Plan”?
Double Innovation Plan is a program specifically for attracting high-level innovation and entrepreneurship talents overseas through public funding. Since its establishment in 2007, this Plan has provided financial support to hundreds of foremost domestic and overseas researchers and entrepreneurs each year.
These granted teams and talents would move to Jiangsu Province for further R&D and engagement with local key industries. How long are they expected to stay? This may depend on the specific beneficiary category (further explained below) the funding belongs to. Generally speaking, it might be at least one month in a year.
3.3 Who can apply?
There are three beneficiary categories under this Plan:
Double Innovation Talent: individuals receiving personal grants for innovation projects in startups, enterprises, universities, or research institutions.
Double Innovation Team: teams receiving R&D funds to support the development of new technologies or innovative solutions. The grant beneficiary team must consist of one leading talent and at least two core members.
Double Innovation Ph.D.: experts with Ph.D. receiving project financial support for conducting innovation development in enterprises, post-doctoral institutes, county-level hospitals, or world-renowned universities.
Please note that the eligibility requirements on direct applicants vary from category to category, but in general it requests for the academic background (Master or Ph.D.) and age limit (below 65 years).
3.4 What are the benefits of this funding opportunity?
If you or your team are selected and be granted, you will receive a series of policy encouragements and supports, including:
Financial support up to eight million RMB;
Supporting services in dealing with administrative procedures such as visa, housing, schooling for your children, etc.
3.5 When and where can you apply?
Applications are published on an annual basis (usually in April). This year you can apply from 1st April until 20th May. Online applications are submitted on the Jiangsu Provincial High-level Talent Application Management Platform.
4. What to consider while working on the grant application?
Each China’s government funding has its own features, requirements, and benefits. Thus, it is wise to assess and identify the most suitable option depending on your involvement in the Chinese innovation ecosystem. What else shall you keep in mind while preparing for your application?
Emphasise how your innovation can contribute to the Chinese innovation ecosystem. The strategic goal for the innovation funding is to support China’s innovation and economic growth, projects, and experts ensuring that will have greater access to the funds. As a result, it is suggested for your team to develop a comprehensive understanding of local and national development needs, and to address your contribution.
Be patient and be persistent. Applying for Chinese funds is a complicated process that requires time, energy, and resources. The Chinese language and culture may also be a significant barrier for many international researchers and entrepreneurs. However, this shall not be the showstopper of your financing and success journey in the Chinese market.
Make good use of your Chinese native know-how. Keep up with the latest funding opportunities and regulations can be demanding, especially for international experts unfamiliar with the Chinese public system. Utilizing quality Chinese personnel or external help in the process can be immensely rewarding.
The public innovation funding in China can be a beneficial choice for your business, especially if China is going to be one of your target markets in the long run. However, there are also plenty of other financing options from China, such as venture capitals, business angels, public and private accelerating programs, business loans, etc.
This blog is intended to provide you an introductory understanding, especially if you are in the high-tech space. For each individual funding, the practices may vary notably. This article only provides funding information and should not be treated as legal advice. If you are determined to move forward to this route, you are highly suggested to refer to the official announcement sources. Of course, please feel free to contact us if our expert support is needed along the way.