China cut 2.63 trillion yuan ($361 billion) in taxes and fees targeted at technological innovation and high-end manufacturing last year, as the country strives for self-sufficiency in key technologies to maintain its competitive edge amid growing geopolitical and economic pressure.

Latest data from the State Taxation Administration, the country's top tax authority, showed that tax breaks for companies' research and development spending and technology transfers totaled 806.9 billion yuan last year.

Tax incentives for high-tech enterprises and emerging industries — including a 15 percent corporate income tax rate and exemptions on new energy vehicle purchases — added up to 466.2 billion yuan in 2024.

To tackle bottlenecks in core technologies and attract talent in sectors including integrated circuits, China offered an additional 132.8 billion yuan in value-added tax deductions.

Notably, another major boost came from advanced manufacturing, with value-added tax rebates and deductions amounting to 1.11 trillion yuan, underscoring the government's focus on upgrading production lines and transitioning to high-tech, high-value manufacturing.

Li Xuhong, deputy head of the Beijing National Accounting Institute, said: "Such measures will help taxpayers fully save on operating costs through R&D expense deductions. Relief will further stimulate their vitality and drive innovation capability, all of which will be strong drivers of the development of the country's private sector."

The Chinese tax authority's efforts to stimulate innovation are bearing fruit. VAT invoice data showed that last year, sales revenue in high-tech industries grew 9.6 percentage points faster than the national average. Revenue from technology commercialization services jumped 27.1 percent year-on-year.

The digital economy also saw steady gains, with core industries expanding 7.1 percent year-on-year and enterprise procurement of digital technologies rising 7.4 percent, reflecting deepening integration of digital tools in industrial production.

On the other hand, manufacturing, a cornerstone of the economy, grew steadily with sales revenue increasing 2.2 percentage points faster than the national average.

Advanced sectors saw particularly strong growth, with sales in computer manufacturing up 14.4 percent year-on-year, telecommunication and radar equipment up 19 percent, and intelligent equipment manufacturing up 10.1 percent, all of which signals the sector's move toward high-end, smart production.