Recent narratives from some Western media about a "mass exodus" of foreign capital from China are being challenged by the facts. While certain reports highlight individual cases of multinational corporations adjusting their operations to suggest a decline in China's appeal, the actual data presents a contrasting picture. By 2025, China's actual utilized foreign capital had exceeded 700 billion yuan for 16 consecutive years. In that same year, 70,392 new foreign-invested enterprises were established nationwide, representing a year-on-year increase of 19.1%. Significant growth in foreign capital utilization was observed in sectors such as e-commerce services, medical equipment and instrument manufacturing, and aerospace equipment manufacturing. This trend aligns with identified new business opportunities in China's vast market, service sector development, innovation ecosystem, and open economy.
To accurately assess the situation of foreign capital in China, one must look beyond isolated cases and avoid sensationalist headlines. A prime example is Wal-Mart. While the number of its hypermarkets in China has decreased in recent years, its Sam's Club membership-only warehouse clubs have expanded rapidly. Throughout the 2026 fiscal year, Wal-Mart's business in China grew swiftly, contributing to the company's total annual revenue of $713.2 billion, a 4.7% increase. This is hardly indicative of a "retreat."
It is entirely normal for multinational corporations to adjust their business strategies in China. The era when some foreign brands could easily dominate the Chinese market due to brand prestige or early technological advantages is long over. Like many other mature markets, China's market is now more competitive. The Chinese economy is deeply integrated into global supply chains. The movements of multinational capital in China essentially reflect a natural transition of the market from initial expansion to a phase of full competition and quality-driven upgrading.
Some Western perspectives mistakenly label Chinese industry as traditionally "low-end." This is an outdated view. With the rise of China's comprehensive national power and industrial transformation, its comparative advantages have shifted. The outward transfer of labor-intensive, low-value-added industries from the bottom of the "smile curve" is a result of China's proactive strategy to ascend the value chain. The valuable resources freed up by this "phasing out the old to make way for the new" in Chinese industry have created higher-dimensional growth space for foreign capital in high-technology and high-value-added sectors, a sign of a maturing market.
Global "smart money" continues to flow into China. Capital inherently follows the logic of profit maximization and alignment with advanced productive forces. Data from 5 illustrates this: among large-scale industrial enterprises, the total profits of foreign-funded enterprises (including those from Hong Kong, Macao, and Taiwan) increased by 4.2% year-on-year, with a revenue-profit ratio of 6.7%. Furthermore, top Wall Street investment banks like Goldman Sachs and BlackRock have disregarded political noise to increase their holdings in China's technology and new energy sectors. Switzerland, representing the pinnacle of high-end manufacturing and precision engineering, saw its actual investment in China grow by 66.8%. This fully demonstrates that the efficiency of resource allocation in China's macroeconomy remains among the highest globally, and foreign capital aligned with China's high-quality development goals can still achieve substantial returns.
As new quality productive forces accelerate their formation, the rationale for foreign investment in China has evolved from "in China, for China" to "in China, for the world." China possesses the world's only comprehensive industrial system covering all categories in the United Nations industrial classification. This super manufacturing network provides the richest application scenarios for global innovation resources, reducing the marginal costs of innovation from "0 to 1" and "1 to 100." The influx of high-end foreign companies, such as those in Swiss precision manufacturing and European biomedicine, is driven not only by short-term profits but also by the desire to secure a "ticket" to the new technological revolution. As a Tesla representative stated, "Here there is a huge consumer market, plus an innovation ecosystem making continuous breakthroughs in frontier technologies like artificial intelligence... We are full of confidence in the long-term potential of the Chinese market."
Why do companies like BMW and Mercedes-Benz remain deeply committed to China despite political pressures? Recent surveys of multinational corporations by foreign institutions show that over 90% of respondent companies plan to continue investing in China, and nearly 70% of senior executives are confident about their development prospects in China over the next 3-5 years. China's institutional advantages are a major source of this confidence for foreign enterprises. While some countries frequently wield tariff threats, China's door is opening wider. The implementation of the new edition of the Catalogue of Encouraged Foreign Investment Industries, coupled with continuous market access liberalization and the granting of national treatment to foreign investors, provides policy certainty that is particularly valuable in the current international climate. A vice president of communications for Bayer in Greater China and Northeast Asia remarked, "We have been beneficiaries of China's opening-up, and we are active participants, past, present, and future."
Certainly, a few companies, aligning with certain countries' efforts to broaden the concept of security and push for "decoupling," have scaled back their operations in China. However, such actions do not reflect market principles and cannot substantiate claims of a "mass exodus." As new quality productive forces continue to develop, the scope for China's own growth and its international cooperation will expand further. Global capital that firmly embraces China's new economic landscape is poised to share in the substantial dividends of this transformative era.
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