On June 22nd, the Ministry of Commerce, the National Development and Reform Commission, and the Ministry of Finance jointly issued the "Action Plan for Stabilizing and Improving the Use of Foreign Investment." This plan outlines 15 policy measures across five key areas, including expanding market access and enhancing the convenience for foreign investment.
At a press conference held by the State Council Information Office, Ling Ji, Vice Minister of Commerce and Deputy International Trade Representative, stated that to build new advantages for attracting foreign capital during the "15th Five-Year Plan" period, the Ministry of Commerce collaborated with 27 departments, including the National Development and Reform Commission and the Ministry of Finance. They focused on common issues of concern to foreign-invested enterprises to formulate new measures for stabilizing foreign investment, resulting in this Action Plan. "Our next steps will focus on stabilizing existing investment, expanding new investment, and improving its quality," Ling Ji said.
Focus 1: Decline in China's Actual Utilized Foreign Investment Narrows in First Five Months
Ling Ji, responding to questions at the press conference, described the overall characteristics of foreign investment in China as "stable in scale, stable in operations, stable in contribution, and stable in expectations." Currently, the number of foreign-invested enterprises in China continues to grow, reaching 533,000 by the end of 2025, with an average annual growth rate of 4.5% compared to the end of 2020. According to incomplete statistics, over 8,000 foreign-invested enterprises increased their investment in China in 2025, a year-on-year increase exceeding 10%.
Regarding operational performance, during the "14th Five-Year Plan" period, the operating revenue of foreign-invested enterprises reached 262.7 trillion yuan, with profits of 21.4 trillion yuan, both indicators showing average annual growth of around 5%. Recently, the US-China Business Council released its "China Business Environment Survey," indicating that nearly three-quarters of respondent companies (those registered in the US with investments or operations in China) reported stable or growing revenue in China during the 2025 fiscal year. Simultaneously, 92% of enterprises stated they were profitable in China last year.
However, influenced by external adverse factors such as sluggish global economic growth, geopolitical conflicts, and a downturn in global cross-border direct investment, China's actual utilized foreign investment from January to May this year decreased by 8.6% year-on-year. Notably, this decline narrowed by 4.6 percentage points compared to the same period last year. Ling Ji noted that while foreign investment has seen both inflows and outflows in recent years, the overall trend shows inflows exceeding outflows. Currently, China's scale of attracting foreign investment remains the largest among developing nations, and China consistently ranks as a primary global destination for cross-border investment. "The increment of China's actual utilized foreign investment has generally remained above $100 billion. The overall stability of this increment fully demonstrates that China's attractiveness to foreign capital remains resilient."
Focus 2: Prudent Implementation of Open Pilots in Biotechnology and Wholly Foreign-Owned Hospitals
Jing Qin, Director of the Foreign Investment Department at the National Development and Reform Commission, stated that foreign-invested enterprises are important participants in China's modernization. The Commission will focus on three dimensions: institutional openness, easing market access, and maintaining fair competition to facilitate foreign investment in both "market access" and "market operations," creating new opportunities, opening new avenues, and providing new momentum for global investors.
Jing Qin pointed out that over the years, China has issued multiple policy documents on opening up, forming a relatively comprehensive policy and operational framework for utilizing foreign investment, which has strengthened foreign investors' expectations and confidence in China. Moving forward, the National Development and Reform Commission will prioritize institutional openness, deepen reform and innovation, orderly expand the opening of China's commodity and service markets, and promote compatibility with global rules and regulations in areas such as intellectual property protection, government procurement, and finance, creating more new opportunities for global investors.
Regarding easing market access, Jing Qin mentioned that the nationwide negative list for foreign investment access has been reduced to 29 items, with all restrictive measures in the manufacturing sector now "cleared," reaching a new height of openness. The next step involves promoting the orderly expansion of openness in telecommunications, internet, education, culture, healthcare, and other fields, prudently implementing open pilots in value-added telecommunications, biotechnology, wholly foreign-owned hospitals, and promptly evaluating and summarizing pilot experiences.
She particularly emphasized strengthening the linkage between revising the negative list and open pilots. For areas where pilot programs prove effective and experience matures, institutional openness outcomes will be formed by shortening the negative list, opening broader new avenues for foreign-invested enterprises' development in China.
On maintaining fair competition, Jing Qin stated that the fair competition review system has been deeply implemented, effectively promoting fair competition among various market entities, including foreign-invested enterprises. Next, the National Development and Reform Commission will work with relevant departments to effectively safeguard national treatment for foreign-invested enterprises and protect their legitimate rights and interests in areas such as factor acquisition, qualification licensing, and standard setting.
Focus 3: Services Sector Accounts for 70% of Actually Utilized Foreign Investment
During the process of utilizing foreign investment, China's level of openness has continuously increased. Currently, the nationwide negative list for foreign investment access has been reduced to 29 items, with all manufacturing sector access restrictions cleared. In this Action Plan, deepening openness in the services sector is placed at the forefront of expanding market access.
Building on the pilot openings in biotechnology, value-added telecommunications, and wholly foreign-owned hospitals in 2024, the Action Plan adds the steady expansion of open pilots for vocational skills training institutions, vocational colleges, and high-level universities in science, engineering, agriculture, and medicine. It also proposes supporting Beijing in elevating the construction level of the National Comprehensive Demonstration Zone for Expanding Openness in Services, promoting the pilot implementation of open measures in key modern service sectors like the digital economy and healthcare. It aims to promote a comprehensive upgrade of the Closer Economic Partnership Arrangements with Hong Kong and Macao, increasing the level of openness for investors from Hong Kong and Macao in the services sector.
It is understood that the services sector is the main area for China's opening up and attracting foreign investment, accounting for as high as 70% of actually utilized foreign capital. Zhao Fujun, a researcher at the Department of Foreign Economic Research, Development Research Center of the State Council, stated that China is advancing high-level opening up. With the manufacturing sector now fully open, the focus is on the services sector. This Action Plan's emphasis on expanding market access in the services sector fully reflects the priority of high-level opening up. "By expanding openness in the services sector and enhancing the level of investment liberalization and facilitation, we will continuously strengthen the attractiveness to foreign capital, which will certainly help stabilize and improve the use of foreign investment," Zhao Fujun said.
At the press conference, Wang Ya, Director of the Foreign Investment Administration Department of the Ministry of Commerce, stated that since 2024, the Ministry of Commerce, together with relevant departments, has selected some regions to take the lead in launching pilot programs for expanding openness in three areas: cloud computing, wholly foreign-owned hospitals, and biotechnology. A number of foreign-invested enterprises have already been established or commenced operations. Furthermore, since 2025, the Ministry of Commerce has accelerated efforts to expand the comprehensive pilot program for opening up the services sector, adding 9 new pilot cities and assigning a new batch of pilot tasks. For example, in telecommunications, pilot tasks include removing foreign equity ratio restrictions for services like app stores and internet access; in healthcare, supporting foreign doctors in opening clinics.
Wang Ya indicated that next, the Ministry of Commerce will continue to increase policy support, encourage foreign investment participation in the integrated, digital, and intelligent transformation and upgrading of the services sector, and assist in expanding and improving the quality of China's services industry.
Focus 4: Expanding the Pilot Scope for Wholly Foreign-Owned Hospitals
Beyond the services sector, supporting foreign investment participation in high-quality development of industries like pharmaceuticals is also a key focus of the Action Plan. The plan proposes expediting research and issuing detailed implementation rules for segmented drug production to facilitate overseas drug marketing authorization holders in conducting cross-border segmented production of biologics and chemical drugs. Simultaneously, it calls for expediting research and approval to further expand the regional scope of open pilots in biotechnology and wholly foreign-owned hospitals.
Ling Ji explained at the press conference that cross-border segmented production refers to distributing different stages of drug production across different countries and regions, enabling effective resource allocation. Currently, open pilot areas for biotechnology in China are the three pilot free trade zones of Beijing, Shanghai, and Guangdong, and the Hainan Free Trade Port. Pilot areas for wholly foreign-owned hospitals cover nine locations, including Beijing, Shanghai, Tianjin, and Nanjing.
It is worth noting that the Action Plan proposes fully implementing national treatment for foreign-invested enterprises. It specifically mentions strictly implementing the fair competition review system in areas such as government procurement and bidding. Zheng Yong, Director of the Treasury Department at the Ministry of Finance, stated at the press conference that treating all types of market entities, including foreign-invested enterprises, equally has always been a fundamental principle upheld in China's government procurement. In recent years, the Ministry of Finance has continuously deepened reforms of the government procurement system, actively aligned with high-standard international economic and trade rules, optimized the government procurement business environment, and safeguarded national treatment for foreign-invested enterprises in government procurement.
Specific measures include further improving the legal framework for government procurement, clarifying standards for domestic products in procurement, strengthening supervision and management of government procurement, and continuously improving the administrative adjudication mechanism for government procurement. Zheng Yong stated that next, the Ministry of Finance will follow the requirements of the "15th Five-Year Plan" and the Action Plan to accelerate government procurement system reforms, fully implement the principle of fair competition, continuously optimize the government procurement business environment, and better ensure equal participation of domestic and foreign enterprises in government procurement activities.
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