China’s 2025 Foreign Investment Strategy: Essential Actions and Opportunities

On February 19, 2025, China launched an action plan to stabilize foreign investment, enhancing market access and promoting sectors like biotechnology and healthcare. The initiative aims to create a fair business environment, improve transparency, and facilitate foreign mergers and acquisitions.

On February 19, 2025, China introduced a comprehensive action plan to stabilize foreign investment (hereinafter referred to as the “action plan”), reaffirming its commitment to high-standard opening-up and advancing economic modernization. Approved during a State Council executive meeting, the action plan outlines key measures to attract and retain foreign investment by expanding market access, easing financial restrictions, and fostering a fair business environment. With a focus on sectors such as biotechnology, telecommunications, education, and healthcare, the initiative seeks to enhance foreign participation in China’s industrial and service sectors.

The move comes as China continues to be a major global investment hub, having established over 59,000 new foreign-invested enterprises (FIEs) in 2024 and maintaining an annual foreign investment inflow exceeding RMB 1 trillion (US$137.29 billion) for three consecutive years.

China’s newly announced action plan reflects a concerted effort to enhance foreign investment, strengthen economic stability, and maintain momentum in its industrial development. At its core, the plan underscores China’s commitment to creating a more attractive and equitable business environment. A pivotal aspect of this strategy is the continuous evolution of the Invest in China brand, which will be refined each year through an organized roadmap that emphasizes targeted promotion and collaboration.

In light of the shifting global economic landscape, China has set out to address the diverse needs of international investors by tailoring its approach based on the unique characteristics of major investment sources. By building on bilateral investment promotion mechanisms and fostering closer cooperation between central and local governments, China is positioning itself as a reliable and strategic partner for foreign enterprises.

A key focus of the action plan is reinforcing existing FIEs and encouraging reinvestment within the country. The government aims to optimize the business climate to ensure equal treatment for all enterprises, fostering an environment where companies are not only encouraged to invest but also to reinvest their profits domestically. To support this, revisions to the Catalogue of Encouraged Industries for Foreign Investment will direct foreign capital toward high-value sectors, including advanced manufacturing, modern services, and underdeveloped regions in central, western, and northeastern China. Additionally, efforts to enhance transparency in foreign enterprises’ reinvestment activities will ensure a more predictable and stable investment process.

To facilitate foreign mergers and acquisitions (M&A), the action plan also outlines steps to simplify regulations under the framework of the Foreign Investment Law. By streamlining M&A procedures, lowering barriers for cross-border equity swaps, and improving regulatory oversight, China aims to create a more investor-friendly landscape that supports long-term engagement and innovation.

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