New measures aim to boost foreign investment in China

The Chinese government has unveiled a plan to stabilise foreign investment this year, which analysts say signals the country’s determination to achieve high-level opening-up in the face of rising global protectionism.

The plan, adopted at the State Council executive meeting chaired by Premier Li Qiang, outlined more practical and effective measures to both retain existing and attract new foreign investment because of the vital role that foreign-invested businesses play in terms of job creation, export stability and industrial upgrading.

In a statement, the government said China will fully implement its commitment to remove all market access restrictions for foreign investors in the manufacturing sector and expand the list of sectors encouraging foreign investment.

According to the plan, the country will encourage foreign enterprises to reinvest their capital within the Chinese market and participate more actively in equity investments. Meanwhile, steps will be taken toward optimizing the rules and regulations governing foreign mergers and acquisitions, as outlined in the plan.

Foreign enterprises will be treated on an equal footing with their Chinese counterparts in government procurement, according to the plan, which also put an emphasis on widening the financing options available to foreign-invested enterprises and strengthening intellectual property protection for them.

China will further open up its services sector, with a particular focus on accelerating pilot programs in key areas such as telecommunications, healthcare and education, said Li Yongjie, deputy international trade representative of the Ministry of Commerce.

The country is committed to aligning itself with high-standard international trade and economic rules while building a network of high-level opening-up platforms such as free trade zones as it aims to enhance its overall business environment, Li said.

A total of 59,080 new foreign-invested firms were established across China in 2024, an increase of 9.9% year-on-year, according to data from the ministry.

“These proactive opening-up policies stand in stark contrast with the intensifying investment restrictions tipped by certain economies, and have created a more welcoming and accessible environment for foreign enterprises — particularly small and medium-sized ones — looking to enter the Chinese market,” said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

While the global economy grapples with sluggish demand, the sheer size of China’s consumer base, the nation’s rising middle class and growing purchasing power have presented a crucial lifeline for foreign enterprises navigating broader economic uncertainties, Zhou added.

Chinese economy expected to rebound 2025

The Chinese economy is expected to rebound in 2025 despite new variables, according to Guan Tao, global chief economist at BOCI China.

He said the unprecedented popularity of domestic travel and the emergence of DeepSeek AI model have boosted confidence in the Chinese economy, as well as creating positive expectations for the future.

Guan said the country plans to further boost consumption among urban residents. Data show that the median nominal per capita disposable income of urban residents grew 4.65% on average between 2020 to 2024.

Furthermore, China needs to promote a new type of urbanization and comprehensive rural revitalization in a co-ordinated manner, promote the integrated development of urban and rural areas, and further stimulate rural consumption potential, he said.

The economist said China’s economic policy focuses have shifted to benefiting people’s livelihood and promoting consumption.

Recently, the government has pre-delivered 81 billion yuan ($11.09 billion) of funds for consumer goods trade-in in 2025 to support local governments in the continuous implementation of the policy.

Moreover, China launched an action plan to promote large-scale equipment renewal and trade-in of consumer goods in March 2024 as part of efforts to boost domestic demand and support economic growth, Guan added.