China Further Opens Its Door to Attract FDI

A report from chinadaily.com.cn on Mar. 26th, 2025:

China recently unveiled a strategic action plan for stabilizing foreign investment in 2025 to align its high-level opening-up with international economic and trade rules after having removed many restrictions on foreign investment in the manufacturing sector last year.

As part of China’s latest efforts to attract more FDI, the action plan includes 20 specific measures in four aspects. China will implement pilot programs to open up such sectors as value-added telecommunications, biotechnology and wholly foreign-owned hospitals, providing comprehensive services for foreign-invested projects in these sectors.

In addition to progressively liberalizing the education and culture sectors, China hopes to expand its pilot programs by opening up industries such as the services sector, telecom and medical services. China is also committed to removing all market access restrictions in the manufacturing sector, ensuring equal treatment of goods produced by domestic and foreign enterprises.

About 59,080 new foreign-invested businesses were started in China in 2024 alone, up 9.9 percent year-on-year. On the other hand, China’s overseas investment has increased significantly from 2021 to 2023 — to more than 1 trillion yuan ($139.5 billion) a year. In January, total FDI in China reached 97.59 billion yuan, an increase of 27.5 percent over the previous month, with 12.5 percent of all FDIs being used in high-tech manufacturing.

China is still a coveted investment destination, and the action plan will further boost investor confidence in China’s market, encourage foreign entities to invest more in the country, attracting more foreign capital in the shape of long-term investment in Chinese publicly-traded companies.

Besides, the government’s policy to improve financial flexibility will allow foreign-invested businesses to access domestic finance for equity investment by lifting restrictions on domestic loans. The strategic investment of foreign entities in Chinese equity offers the opportunity to unleash the unrealized growth potential of the stock market, while boosting flexibility and encouraging larger-scale investment.

By creating a more business-friendly environment through, among other things, the continuous shortening of the negative list, and with 21 free trade zones, a vast market, growing numbers of foreign enterprises, and comprehensive and efficient industry and supply chains, China is set to draw more foreign investment. The Chinese government is also promoting innovation, building mega projects, advancing new quality productive forces, further deepening reform and making concerted efforts to attract more investment to achieve sustainable development.