China Registers Significant Increase in New Foreign-Invested Firms Amidst Evolving Investment Landscape

Growth in New Foreign Entities

In the first three quarters of 2025, China registered a notable increase in the number of new foreign-invested firms, with 48,921 new entities established. This represents a significant year-on-year rise of 16.2 percent, according to data released by the Ministry of Commerce. The figures underscore China's continued appeal for global businesses seeking to establish a presence in the market.

Nuanced FDI Inflow Trends

Despite the surge in new firm registrations, the actual foreign direct investment (FDI) inflow into China presented a more complex picture. During the first nine months of 2025, actual FDI inflow totaled 573.75 billion yuan (approximately 80.89 billion U.S. dollars), marking a 10.4 percent year-on-year decrease. However, September alone saw a positive shift, with FDI rising by 11.2 percent year-on-year. This trend occurs within a global context where overall FDI fell by 11 percent in 2024, with early 2025 data suggesting a potential third consecutive year of contraction globally.

Sectoral Investment and Policy Initiatives

Foreign investment has been particularly active in key sectors. In the first three quarters of 2025, the manufacturing industry attracted 150.09 billion yuan in actual FDI, while the services sector drew 410.93 billion yuan. High-tech industries have been a significant magnet for capital, attracting 127.87 billion yuan in the first half of 2025. Specific areas within high-tech that saw robust growth include:

• E-commerce services, which surged by 127.1 percent in the first half of 2025.
• Aerospace equipment manufacturing, with an increase of 86.2 percent in the first half of 2025.
• Chemical pharmaceuticals, growing by 57.8 percent in the first half of 2025.

China has actively pursued policies to foster a more open investment environment. The country has intensified efforts to stabilize and attract FDI through expanded market access, policy upgrades, and institutional reforms, operating under a paradigm of 'managed liberalization'. Notably, all restrictions on foreign investment in the manufacturing sector have been removed under the 2025 Foreign Investment Negative List. In February 2025, the Ministry of Commerce also issued an 'Action Plan for Stabilizing Foreign Investment' to further enhance investor confidence.

Commitment to Wider Openness

Official statements and events throughout 2025 have consistently highlighted China's commitment to wider openness and providing opportunities for global businesses. The China International Import Expo (CIIE), for instance, served as a platform to showcase this dedication, attracting over 4,000 companies from 155 countries and regions. President Xi Jinping emphasized that China offers a vast platform for innovation and growth for the global business community, noting that the country's negative list for foreign investment has been significantly shortened, with zero items remaining in the manufacturing sector. Furthermore, China successfully met its 14th Five-Year Plan (2021-2025) target for actual utilized FDI, reaching 708.73 billion U.S. dollars by June 2025, six months ahead of schedule.