China’s Economy Shows Resilience: Foreign Investment, Chip Trade, and Wealth Management Boom

Three distinct data points released in recent weeks paint a compelling picture of China’s economic resilience in mid-2026: foreign investment stock has surpassed $3.6 trillion with over 530,000 overseas-invested enterprises operating in the country, Japan’s semiconductor exports to China surged nearly 48% in 2025, and China’s family trust market has approached 1 trillion yuan ($147 billion) as first-generation entrepreneurs accelerate wealth succession planning. Together, these signals suggest that despite geopolitical headwinds and global economic uncertainty, China remains a magnet for foreign capital, a critical node in global semiconductor supply chains, and a society undergoing profound structural transformation in wealth management.

Foreign Investment: Depth Over Decline

According to data released by China’s Ministry of Commerce on May 23, the number of overseas-invested enterprises in China has risen for three consecutive years to surpass 530,000, with total accumulated foreign direct investment (FDI) exceeding $3.6 trillion. The Ministry of Commerce reported that 20,113 new foreign-invested firms were established in the first four months of 2026, up 6.8% year-on-year.

While overall FDI in actual use dipped 10.3% to 287.69 billion yuan ($42 billion) during the same period, high-tech industries bucked the trend dramatically. High-tech FDI surged 20.3% year-on-year to 116.33 billion yuan ($17.12 billion), accounting for 40.4% of total FDI — a 10.3 percentage point increase from the previous year. China Daily noted that investment in R&D and design services jumped 108.4%, while computer and office equipment manufacturing rose 22.9%.

Geographically, investment from Luxembourg, Switzerland, France, and the U.S. into mainland China increased by 110.3%, 60.8%, 58.3%, and 24.5% respectively. More than 3,000 foreign-funded enterprises expanded their investment in China during the January-April period alone.

Global executives voiced strong confidence. Yin Zheng, Executive Vice President of Schneider Electric for China and East Asia, said the country “has become Schneider Electric’s second-largest global market and an important source of innovation and development.” Anna, President of Henkel Greater China, noted that “China has demonstrated its unwavering determination to expand high-level opening up” and described the market as a “home” for enterprises. Xu Xinxiong, CEO of TCP Group (Red Bull), emphasized that “China’s consumer market has large volume and sufficient potential.”

Japan’s Chip Exports Surge as Bilateral Trade Rebounds

In a striking illustration of economic interdependence amid geopolitical tension, Japan’s integrated circuit exports to China surged 47.9% to $28.7 billion in 2025, according to the Japanese Chamber of Commerce and Industry in China (JCCIC). As Caixin Global reported, bilateral trade between Japan and China rose 6.2% to $343.3 billion in 2025, ending three consecutive years of decline.

Wang Xiaolong, Director of semiconductor research firm ICwise, attributed the surge to “surging AI-related demand, which lifted sales and prices of components like MLCCs and NAND flash memory chips.” The global memory chip market shifted from oversupply to severe shortages and soaring prices by the third quarter of 2025, according to research firm Omdia.

Notably, while finished chip exports boomed, semiconductor equipment exports to China fell 2.3% due to ongoing export controls aligned with U.S. policy. This dual dynamic — surging demand for chips but restricted access to manufacturing tools — underscores the complex nature of the technology relationship between the two countries.

Despite these tensions, Japanese firms remain deeply committed to the Chinese market. The JCCIC’s 2026 White Paper, compiled from input by 8,102 Japanese enterprises, found that approximately 85% of Japanese firms in China plan to maintain or expand their operations. Tetsuro Homma, President of the JCCIC, stated that “China, for Japanese companies, is no longer just a huge consumer market, but also a vital manufacturing base and a hub of innovation.” Of the 70,000 overseas branches operated by Japanese companies worldwide, 30,000 are located in China, according to Global Times.

At the same time, competition is intensifying: 74.5% of Japanese firms now view Chinese companies as their main competitors, reflecting China’s rapid industrial upgrading.

Family Trusts Near 1 Trillion Yuan as Entrepreneurs Plan Succession

The third signal comes from China’s wealth management sector. The country’s family trust market approached 1 trillion yuan ($147 billion) in 2025, up from approximately 650 billion yuan in 2024, according to Yang Dexing, President of UBS (China) Ltd. As Caixin Global reported, the rapid growth reflects “a shift in wealth planning among China’s first-generation entrepreneurs, who are moving beyond traditional inheritance methods and turning to structured trust arrangements.”

This generational shift is significant. China’s first-generation entrepreneurs — those who built businesses since the reform era began in the 1980s — are now reaching retirement age. UBS projects that heirs on the Chinese mainland and Hong Kong will inherit at least $315.7 billion by 2040. UBS also noted that mainland ultra-high-net-worth individuals added $321.4 billion in wealth in 2025 alone.

However, adoption of formal trust structures remains nascent. A joint report by China Merchants Bank and Bain & Co. found that while 73% of high-net-worth individuals have begun estate planning, most still rely on traditional methods such as insurance and property purchases. The regulatory framework for family trusts has only improved significantly since 2018, suggesting substantial room for market growth.

What This Means

Taken together, these three stories reveal a Chinese economy that is simultaneously attracting deep foreign capital commitments, maintaining critical trade linkages in advanced technology, and maturing its domestic financial infrastructure to manage unprecedented wealth transfers. The high-tech orientation of new foreign investment, the AI-driven demand for semiconductors, and the professionalization of family wealth management all point toward an economy undergoing structural upgrading.

Yet caveats remain. The overall dip in FDI usage suggests short-term volatility, export controls on semiconductor equipment highlight ongoing technology decoupling pressures, and the family trust market, while growing rapidly, is still in its early stages. The question is whether these positive trends can be sustained amid the broader geopolitical and economic challenges that lie ahead.

What to Watch

Key developments to monitor include the trajectory of high-tech FDI as China’s “New Quality Productive Forces” strategy unfolds under the 15th Five-Year Plan (2026-2030), the evolution of Japan’s export control policies and their impact on semiconductor trade, and the pace at which China’s regulatory framework adapts to the projected $315.7 billion wealth transfer by 2040. For global investors and businesses, the message is clear: China remains a market of deep opportunity — but one that demands strategic precision.