China to Expand Telecom, Healthcare Service Sector Opening

China’s Ministry of Commerce (MOFCOM) has announced plans to orderly expand autonomous opening of service sectors including telecommunications, internet, education, culture, and healthcare during the country’s “15th Five-Year Plan” period (2026-2030), signaling a continued push to attract foreign investment and deepen market reforms. Vice Minister of Commerce Yan Dong (鄢东) made the announcement on May 26 at a State Council Information Office press conference held to introduce the upcoming 7th Qingdao Summit for Multinational Corporation Leaders, scheduled for June 15-17, 2026.

Context and Background

The announcement marks the next phase of China’s foreign investment liberalization, following the complete removal of foreign access restrictions in the manufacturing sector. According to Xinhua News, Yan Dong stated that with manufacturing sector restrictions now fully “cleared,” the next step will be to improve the negative list management system for cross-border service trade and implement pilot openings in value-added telecommunications, biotechnology, and wholly foreign-owned hospitals.

This policy shift builds on a series of recent measures. The 2025 edition of the “Catalogue of Industries Encouraging Foreign Investment” added a net 205 encouraged categories, focusing on advanced manufacturing, modern services, high technology, and energy conservation and environmental protection. In July 2025, the National Development and Reform Commission (NDRC) issued 12 measures to encourage foreign-invested enterprises to reinvest their profits in China, including canceling reinvestment registration requirements.

Key Developments

The service sector opening strategy encompasses several dimensions. Yan Dong outlined that China will support foreign-invested service enterprises to extend their value chains and ensure that foreign investment in already-opened sectors is “both accessible and operational” — a phrase emphasizing that market access must translate into actual business operations.

In parallel, China will actively align with high-standard international economic and trade rules, accelerating institutional and regulatory reforms in areas such as intellectual property protection, government procurement, and fair competition. The country will also fully implement a strategy to upgrade its Pilot Free Trade Zones (FTZs), piloting institutional innovations in service trade, green trade, and digital trade.

According to Jiemian News, Yan Dong emphasized that China will attract more multinational companies to place their R&D and high-end manufacturing operations in the country, aiming to improve the structure of foreign investment and strengthen innovation momentum.

Economic Indicators and FDI Performance

The policy announcement comes against a backdrop of strong foreign investment performance. In the first four months of 2026, over 20,000 new foreign-invested enterprises were established in China, up 6.8% year-on-year. More than 3,000 existing foreign enterprises increased their investment during this period. High-tech industries attracted 116.33 billion RMB (approximately US$16.1 billion) in actual foreign investment, surging 20.3% year-on-year.

As reported by CCTV via Sina News, Yan Dong described China as “not only a ‘stabilizer’ for the global economy, but also a ‘must-choose destination’ for multinational corporations laying out their future plans.” Currently, over 530,000 foreign enterprises operate in China, with total accumulated foreign investment stock exceeding US$3.6 trillion. China’s GDP grew 5% year-on-year in the first quarter of 2026.

Analysis and Implications

The service sector opening represents a strategic shift in China’s approach to foreign investment. With manufacturing restrictions already eliminated, services — which account for a growing share of China’s economy — are the logical next frontier. The move is also closely tied to China’s aspirations to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Digital Economy Partnership Agreement (DEPA), both of which require higher standards of service sector openness.

For foreign investors, the announcement opens new opportunities in sectors previously subject to significant restrictions. The ability to establish wholly foreign-owned hospitals and participate in value-added telecommunications services represents a notable expansion of market access. However, implementation will be key — past opening commitments have sometimes faced challenges at local levels, and national security reviews may still apply, particularly in sensitive sectors like telecommunications and healthcare.

What’s Next

The 7th Qingdao Summit for Multinational Corporation Leaders, themed “Joining Hands for the ‘15th Five-Year Plan’ — Towards a New Future,” will serve as a key platform for further elaborating on these policies and potentially announcing specific investment deals. Observers will be watching for details on the timeline and geographic scope of the service sector openings, as well as any specific regulatory changes needed to implement the new policies. Yan Dong indicated that MOFCOM will continue to hold roundtables for foreign-invested enterprises and regularly update the list of key foreign investment projects, signaling an ongoing commitment to improving the business environment for foreign capital.