Beijing has pledged to allow more participation by foreign companies in sectors including telecommunications, healthcare and education in its latest attempt to attract and retain investment from overseas amid worsening geopolitical tensions.
According to a 20-point 2025 action plan from the Ministry of Commerce and the National Development and Reform Commission that was unveiled on Wednesday, China will expand the range of industries in which foreign can invest and facilitate their financing in the country.
To give one example, the plan said China will promote the orderly opening up of the biomedical sector and support qualified foreign companies’ participation in the production of biological products.
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It will also formulate measures on opening up the culture and education sectors, the plan said, without further elaboration.
China does not currently allow wholly foreign-owned preschool education institutions, high schools and universities to operate in the country. It has also banned foreign investment in publishing, news production and film making.
The government will guide foreign investment to “serve the high-quality development” of China’s manufacturing industry, while supporting more involvement in central, western and northeastern provinces, according to the plan.
It will also ensure that goods produced in China by foreign enterprises will be treated the same as those made by domestic producers in government procurement.
The European Union Chamber of Commerce in China welcomed the plan’s call for the nature of domestic products eligible for procurement to be clearly defined, saying it could benefit foreign companies that have invested in production in China. However, it said it also suggested that imports would not qualify for public procurement, which could contribute to a further increase in imbalances with China’s key trading partners.
“We closely follow these high-level announcements,” Jens Eskelund, the chamber’s president, said. “We are looking forward to seeing this implemented in a manner that delivers tangible benefits for our members.”
Foreign companies will also be encouraged to set up investment-oriented subsidiaries in China, and the authorities will help facilitate their foreign exchange management and cross-border personnel and data flows, while encouraging them to invest in listed Chinese companies, the plan said.
Domestic financial institutions will be encouraged to offer more financing services to foreign companies, it added.
Vice-Minister of Commerce Ling Ji told a news conference in Beijing on Thursday that “relevant policies will be implemented and effective” before the end of this year.
He said the plan “fully demonstrates the confidence and determination of the Chinese government to adhere to a high level of opening up and vigorously attract foreign investment”.
Foreign enterprises in China contribute nearly 7 per cent of employment, 14 per cent of tax revenue, about a third of imports and exports, and half of exports of mechanical and electrical products and hi-tech products, Ling added.
The new measures follow similar moves last year in the healthcare and telecommunications sectors, when Beijing announced that it would permit the establishment of wholly foreign-owned hospitals in several major cities. It also removed foreign ownership restrictions on cloud services and other value-added telecoms services provided in domestic pilot zones, particularly in key regions like Beijing, Shanghai, Shenzhen in Guangdong province, and Hainan province.
The new plan said China will further expand the pilot zones for healthcare and telecoms.
It also mentioned that the country will further open up the pharmaceutical field, facilitating the launch of innovative drugs and optimising public procurement of drugs and medical devices offered by foreign companies.
China recorded a net inflow of foreign investment of US$4.5 billion last year, down 89 per cent from 2023, according to data from the State Administration of Foreign Exchange. An administration spokesman attributed the plunge to foreign enterprises increasing financing in China while repaying overseas loans, taking advantage of lower yuan financing costs when compared with borrowing US dollars.
According to the latest data from the Ministry of Commerce, China’s foreign investment in actual use in January was 97.59 billion yuan (US$13.4 billion), a year-on-year decrease of 13.4 per cent.
Ling attributed the decline to the overall sluggishness of global cross-border investment, growing geopolitical tensions and China’s industrial transformation.
“[China’s] ultra-large market, complete and efficient industrial and supply chain system, and continuously optimised innovation environment have provided good development conditions and soil for multinational companies to invest in China, and there is still a solid foundation for stabilising foreign investment,” he said.
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