This English translation is for reference only. The Chinese version shall prevail in case of any inconsistencies.
Notice on Issuing the Implementation Measures for Research Projects on Core and Key Industrial Technologies in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin
All relevant departments:
The Implementation Measures forResearch Projects on Core and Key Industrial Technologies in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin has been approved by the Executive Committee of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, and is hereby issued for implementation. Should any issues arise during implementation, please promptly report them to the Economic Development Bureau of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin.
Economic Development Bureau of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin
April 7, 2024
Normative Document No. 8/2024 of the Economic Development Bureau of the Executive Committee
Implementation Measures for Research Projects on Core and Key Industrial Technologies in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin
Article 1.
Purpose of the Measures
These Measures are formulated in order to effectively implement the Measures for Promoting Scientific and Technological Innovation in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, and to regulate the organization and management of research projects on core and key industrial technologies (hereinafter referred to as “projects”) in the Guangdong-Macao In-Depth Cooperation Zone in Hengqin (hereinafter referred to as the “Cooperation Zone”).
Article 2.
Definition
For the purposes of these Measures, the following definitions shall apply:
1. “Project undertaking entity” refers to the entity that independently, or as the lead applicant, applies for a project in its own name, serves as the recipient of the approved project plan and government financial fund, and assumes responsibility for the project’s implementation and outcomes.
2. “Project participating entities” refer to entities that collaborate with project undertaking entities through agreements to jointly apply for and implement projects while assuming corresponding responsibilities and obligations.
Article 3.
Project Positioning
Priority shall be given to key industries in the Cooperation Zone, including integrated circuits, electronic components, new materials, new energy, big data, artificial intelligence, the Internet of Things, and biomedicine, and funding shall be provided for research projects that enhance core competitiveness and innovation capacity in these fields.
Article 4.
Project Implementation Procedures
Research projects shall be implemented according to the following procedures:
1. Formulation of Annual Project Application Guidelines: The Economic Development Bureau of the Cooperation Zone will focus on the development of key industries, gather project needs and recommendations for application guidelines through multiple channels, and formulate well-planned annual project application guidelines. The application guidelines shall specify the overall objectives for each field, assessment criteria, proposed number of project approvals, funding amounts, and implementation period, among others;
2. Issuance of Notice on Project Applications: The Economic Development Bureau of the Cooperation Zone will issue the notice on project applications based on the application guidelines;
3. Application: Applicant entities shall submit their applications according to the requirements outlined in the notice;
4. Selection: The Economic Development Bureau of the Cooperation Zone will conduct a merit-based selection process, and determine projects for approval through written reviews, panel defenses, and on-site inspections, among others;
5. Public Announcement and Approval: The Economic Development Bureau of the Cooperation Zone will publicly announce the list of projects for approval on the government affairs website of the Cooperation Zone; projects with non-anonymous and valid objections raised during the announcement period shall not be eligible for approval; projects without objections during the announcement period or where objections are deemed invalid upon verification shall proceed with approval; and
6. Signing of project contracts: The Economic Development Bureau of the Cooperation Zone will sign project contracts with the project undertaking entities. The outlined terms in the contract shall include the implementation period, overall and milestone objectives, funding amounts, disbursement methods and usage requirements for funding, and arrangement of intellectual property rights. The terms shall align with the entities’ applications.
Article 5.
Eligibility Criteria
Applications shall meet all of the following conditions:
1. Project undertaking entities shall be the enterprises or institutions that are registered, subject to tax administration, included in statistical reporting, and engaged in substantive operations in the Cooperation Zone. The entities shall also possess independent legal status and standardized financial management systems;
2. Project undertaking entities shall have notable strengths in the relevant fields, possess robust R&D or resource integration capabilities, take on core research and organizational tasks, and receive the largest share of project funding;
3. Project leaders shall be full-time employees of the project undertaking entities;
4. Project undertaking entities shall emphasize the integration of industry, academia, and research, and use advantageous resources both inside and outside the Chinese mainland. The total number of project undertaking and participating entities for the same project shall not exceed six. Additionally, project undertaking entities shall sign authentic and valid cooperation agreements with project participating entities;
5. Project undertaking entities shall prepare budgets for government financial fund in accordance with the Opinions of the General Office of the People’s Government of Guangdong Province on Improving the Management of Provincial Government Spending on Research (No.14 [2022] of the General Office of the People’s Government of Guangdong Province);
6. Applicant projects shall ensure self-raised funding. Where enterprises take the lead in applications, self-raised funding shall account for no less than 70% of the total project investments; where enterprises do not take the lead, self-raised funding shall account for no less than 50% of the total project investments. If the project undertaking entities has established special accounts for upfront R&D investments, such initial investments may be retroactively recognized as self-raised funding, with a maximum retroactive period of six months from the date of application;
7. Project details shall be authentic and shall not overstate the entities’ capabilities or fulfillment of technological and economic criteria. Upon approval, the technological, product-related, economic, and other assessment criteria in the applications shall constitute an integral part of the project contracts;
8. Research projects on core and key industrial technologies shall be subject to application restrictions. Where a project leader or undertaking entity is already responsible for two ongoing projects, they shall not be eligible to apply for additional projects (project leaders may participate in new projects in a non-leading role); and
9. Applicant projects shall also meet the specific application requirements for each field, as outlined in the annual project application guidelines.
Article 6.
Funding Amount and Disbursement Method
The Economic Development Bureau of the Cooperation Zone will organize experts to conduct competitive reviews based on the projects’ technological advancement, commercialization potential, and the role in promoting industrial development. Funding shall be provided in tiers according to the review results, with a maximum of RMB 10 million for each project.
A milestone-based method shall be applied to funding disbursement. 50% of the total funding shall be disbursed upon signing the project contracts, and the remaining amount shall be disbursed to project undertaking entities upon passing the milestone assessments, under the terms specified in the project contracts.
Article 7.
Use of Funding
Project undertaking entities shall use government financial fund as specified below:
1. Special accounts shall be set up for project expenditure accounting, and ensure separate accounting for government financial fund and self-raised funding. Project undertaking entities shall be subject to relevant supervision and inspection; and
2. Government financial fund includes direct and indirect expenses, with indirect expenses not exceeding 30% of direct expenses after deducting equipment costs.
The “direct expenses” mentioned in Item 2 of the preceding paragraph refer to expenses directly associated with the R&D process, including equipment, operational, and direct personnel costs; the “indirect expenses” refer to expenses incurred by project undertaking entities during project implementation that may not be classified as direct expenses, including utility expenses (such as water, electricity, and heating), management fees, and performance-based budgeting.
Article 8.
Change of Project Contracts
During the implementation period, the content of project contracts shall generally remain unchanged. If changes to any of the following items are necessary, the project undertaking entities shall submit applications to the Economic Development Bureau of the Cooperation Zone before the expiration of the implementation period:
1. Project Undertaking Entities: Changes to project undertaking entities shall require prior agreement between the original undertaking and participating entities. A signed and sealed agreement from all involved entities, both before and after the changes, shall be submitted;
2. Project Leaders: In the event that project leaders are unable to fulfill their responsibilities due to job transfers, outbound trips, death, illness, or other major reasons, applications for change may be submitted. The new project leaders shall possess equivalent technological expertise and qualifications as the original leaders and comply with the application restrictions;
3. Project Details: Changes may involve major research objectives, research topics, innovations, assessment criteria, and other aspects;
4. Total Budget: Any reduction in the total budget shall not exceed 20% of the amount specified in the original project contracts;
5. Project Participating Entities: Changes to project participating entities shall require prior agreement between the project undertaking entities and the original participating entities. A signed and sealed agreement from all involved entities, both before and after the changes, shall be submitted; and
6. Project Duration: Projects may be extended only once, and the extension period shall not exceed one year.
The Economic Development Bureau of the Cooperation Zone shall commission a third-party institution to conduct assessments of the changes and make decisions on the changes.
Where research focuses remain unchanged and assessment criteria are not lowered, project undertaking entities may adjust technology roadmaps, research plans, and project team members at their discretion, and report the changes to the Economic Development Bureau of the Cooperation Zone for recordation. Where the total budget remains unchanged and indirect expenses do not exceed 30% of direct expenses after deducting equipment costs, project undertaking entities may adjust budgetary items based on actual project needs, and report the adjustments to the Economic Development Bureau of the Cooperation Zone for recordation.
During the implementation period, only one change is permitted regarding the project undertaking entities and the project leaders.
Changes to project contracts shall take effect upon recordation or mutual confirmation by both parties and shall serve as an integral part of the contracts and as the basis for milestone assessments and project acceptance.
Article 9.
Milestone Assessment
The Economic Development Bureau of the Cooperation Zone will organize assessments according to the milestone assessment dates specified in the project contracts. Assessment results shall fall into two categories: “Pass” and “Rectifications within the Specific Period”, as defined below:
1. Where project undertaking entities meet the milestone objectives set forth in the project contracts, and appropriately use the government financial fund, the assessment results shall be “Pass”, and the remaining funding shall be disbursed accordingly; and
2. Where projects do not meet the criteria for “Pass”, the assessment results shall be “Rectifications within the Specific Period”. The Economic Development Bureau of the Cooperation Zone will suspend the disbursement of the remaining funding, and notify the project undertaking entities to make necessary rectifications, with a maximum rectification period of six months. Re-assessments shall be conducted upon the expiration of the rectification period. Where projects pass the re-assessments, the remaining funding shall be disbursed; where projects fail to pass, the projects shall be terminated, and the remaining funding shall not be disbursed. The Economic Development Bureau of the Cooperation Zone will, based on the entities’ fulfillment of R&D responsibilities, use of government financial fund, and assessment results, require the project undertaking entities to return part or all of the government financial fund.
Article 10.
Project Acceptance
Project undertaking entities shall submit applications for project acceptance to the Economic Development Bureau of the Cooperation Zone within three months after the expiration of the project implementation period specified in the project contracts. The Economic Development Bureau will organize experts to conduct acceptance reviews upon project completion. Acceptance results shall fall into three categories: “Pass”, “Completion”, and “Fail”, as defined below:
1. Where government financial fund is used in compliance with regulations and the projects meet the agreed assessment criteria on schedule, the acceptance results shall be “Pass”; for projects receiving a “Pass” result, any surplus funding shall remain with the project undertaking entities and be reserved for direct expenses for research activities;
2. Where government financial fund is used in compliance with regulations, the R&D work has been carried out as required in the project contracts, and due diligence obligations have been fulfilled, but the projects fail to meet the stipulated technological, economic, and other criteria due to objective factors, the acceptance results shall be “Completion”; for projects receiving a “Completion” result, the undertaking entities shall return any surplus government financial fund; and
3. Where projects do not meet the criteria for “Pass” or “Completion”, the acceptance results shall be “Fail”; for projects receiving a “Fail” result, the Economic Development Bureau of the Cooperation Zone will, based on the entities’ fulfillment of R&D responsibilities, use of government financial fund, and acceptance opinions, require the project undertaking entities to return part or all of the government financial fund.
Article 11.
Project Termination
Where projects cannot continue due to force majeure, further implementation is no longer necessary, required funding, personnel, and supporting conditions are not in place, or have undergone significant changes leading to the interruption of projects, the project undertaking entities shall apply to the Economic Development Bureau of the Cooperation Zone for project termination in a timely manner.
Where major risk activities are identified in projects, the Economic Development Bureau of the Cooperation Zone will have the authority to enforce the termination of the projects.
For terminated projects, the Economic Development Bureau of the Cooperation Zone will, based on the entities’ fulfillment of R&D responsibilities, use of government financial fund, and acceptance opinions, require the project undertaking entities to return part or all of the disbursed funding.
Article 12.
Applicable Rules
Unless otherwise provided by laws and regulations, applications under these Measures shall not affect the applicants’ eligibility for other policy support and preferential treatment from the state or Guangdong Province, except for those borne or matched by the government of the Cooperation Zone.
In cases where these Measures overlap or conflict with other policies issued by the Cooperation Zone or with requirements from higher authorities that involve financial obligations or supporting funds from the Cooperation Zone, except as otherwise specified by other regulations, applicants may choose the most favorable option under the principle of “prioritizing the higher standard without duplication”.
Article 13.
Supervision of Funds
Applicants shall ensure the completeness, authenticity, accuracy, and legality of the application materials, and bear liability for the submitted materials. Applicants who provide false materials or fraudulently obtain support funds shall be subject to strict investigation and punishment in accordance with relevant regulations. In cases of serious violations, the applicants shall be held liable in accordance with the law.
Where an applicant is subject to criminal penalties or administrative penalties such as fines, confiscation of illegal proceeds, confiscation of illegal property, restrictions on production or business activities, orders to cease production or business, or orders to close down due to violations of national laws and regulations, the applicant shall be prohibited from applying for relevant subsidies.
Where an applicant relocates out of the Cooperation Zone, cancels its registration, or alters its tax payment or statistical reporting obligations in the Cooperation Zone within five years of receiving the final installment of support funds under these Measures, the applicant shall return all received funds in a lump sum, together with interest calculated at the prevailing Loan Prime Rate (LPR).
Article 14.
Implementation
These Measures will be interpreted and implemented by the Economic Development Bureau of the Cooperation Zone.
Article 15.
Effective Date and Validity Period
These Measures shall come into effect on January 1, 2024 and remain valid until December 31, 2025.