Nearly 4,000 Foreign Firms Boost Investment in China

Nearly 4,000 foreign-invested enterprises expanded their investments in China during the first five months of 2026, according to data released by the Ministry of Commerce at a State Council Information Office press conference on June 22. The figures underscore sustained international confidence in the Chinese market amid global economic headwinds.

Vice Minister of Commerce Ling Ji told reporters that China remains the top developing-country destination for foreign investment and a major global cross-border investment destination. “The scale of China’s attraction of foreign investment remains first among developing countries,” Ling said, as CCTV News reported.

Context: A Decade of Growth

The latest data builds on a sustained upward trajectory. By the end of 2025, 533,000 foreign-invested enterprises were operating in China, growing at an average annual rate of 4.5% since the end of 2020. The total stock of foreign capital in China reached nearly $4 trillion by the end of 2025, with average annual growth of 3.6% over five years.

In 2025 alone, over 8,000 foreign companies increased their investment in China, representing year-on-year growth of more than 10%. The momentum has continued into 2026, with nearly 4,000 enterprises adding capital in just the first five months.

Economic Contributions

Foreign-invested enterprises have become an integral part of China’s economy. Since 2020, they have contributed approximately 2.5 trillion RMB annually in tax revenue — roughly one-seventh of national tax revenue. Over the past five years, these enterprises have employed an average of more than 30 million people annually.

During the 14th Five-Year Plan period (2021–2025), foreign-invested enterprises generated 262.7 trillion RMB in operating revenue and 21.4 trillion RMB in profits, both growing at approximately 5% annually, according to the Ministry of Commerce press conference.

In January–May 2026, foreign enterprises’ foreign trade reached $866.3 billion, accounting for 29.1% of China’s total foreign trade. Industrial value-added output of above-scale foreign enterprises has also grown continuously for three consecutive years from 2023 to 2025.

Shifting Investment Patterns

Foreign investment in China is undergoing a qualitative shift. Data from earlier this year shows that in January–February 2026, 8,631 new foreign-invested enterprises were established in China, up 14% year-on-year. While total FDI value dipped 5.7% during the same period, investment in high-tech industries surged 20.4% year-on-year, accounting for 39.2% of total FDI.

As China Daily reported, FDI in research and development and design services jumped 171.8%, computer and office equipment manufacturing rose 84.1%, and electronic and communication equipment manufacturing grew 35.5%. Investment from Canada surged 210%, Switzerland 41.3%, and France 3%.

Expert Perspectives

Zhang Jian, Vice-President of the China Institutes of Contemporary International Relations, told China Daily in January: “To invest in China is to invest in the future. This is not just a slogan, but a strategic consensus reached by foreign companies based on China’s policy certainty, robust market growth and technological stability.”

European companies have demonstrated a strong desire to deepen their presence in China, focusing on green transition and intelligent manufacturing. US companies in consumer-related sectors remain optimistic, though some have adopted a wait-and-see approach amid supply chain adjustments. Asian companies have shown robust investment growth.

Outlook: Services and Opening-Up

Looking ahead, Ling Ji outlined the government’s priorities under the 15th Five-Year Plan (2026–2030). “Next, we will focus on promoting services market access and opening-up areas,” he said, adding that China will “continuously expand opening-up, create a better business environment for foreign capital, and further consolidate the foundation for attracting foreign investment.”

The Chinese government has implemented a series of measures to attract foreign capital, including the Foreign Investment Law guaranteeing national treatment, regular updates to the Catalogue of Encouraged Industries for Foreign Investment, and a progressively shortened negative list. The establishment of pilot free trade zones and the Hainan Free Trade Port further signal China’s commitment to opening its economy.

As global economic uncertainties persist — including trade tensions and supply chain restructuring — China’s relatively stable economic growth and massive domestic market of 1.4 billion people continue to position it as a leading destination for international capital. The question for investors is no longer whether to invest in China, but how to best position for the next phase of growth.