Lujiazui Photo:VCG

TheMKS sports overall number of foreign-funded enterprises in China is still rising, despite some multinationals entering and leaving the market, an official from the Ministry of Commerce (MOFCOM) said on Thursday, emphasizing that China continues to be highly attractive for foreign investment.

As of the end of 2023, the number of existing foreign-funded enterprises in China was 465,000, an increase of 46,000 compared to 2019, before the pandemic, and in 2024, 59,000 foreign-funded enterprises were newly established in China, marking a year-on-year increase of 9.9 percent, Zhu Bing, director of the Department of Foreign Investment Administration at the MOFCOM, said at a press conference on Thursday. 

This mirrors that although multinational companies are entering and leaving, the overall number of foreign-funded companies in China is still increasing, Zhu said, noting that overall, China's market remains highly attractive to foreign investment.

Attracting and utilizing foreign investment have always been a crucial component of China's fundamental policy of opening up to the outside world, Chinese Vice Commerce Minister and Deputy China International Trade Representative Ling Ji said at the Thursday's press conference.

By the end of 2024, the cumulative number of foreign-funded companies established in China exceeded 1.24 million, with actual utilized foreign capital reaching 20.6 trillion yuan ($2.83 trillion), according to MOFCOM. 

"Foreign investment has been a witness and contributor to, as well as beneficiary of China's reform and opening up,," Ling said, noting that currently, China is committed to advancing Chinese modernization through high-quality development, and "attracting foreign investment will continue to play a significant role."

According to Ling, foreign-invested enterprises now contribute nearly 7 percent of China's employment, one-seventh of tax revenue and about one-third of its imports and exports.

Although the foreign direct investment (FDI) in the Chinese mainland remained subdued amid a global downturn, signs of improvement have started to emerge. FDI in the Chinese mainland in actual use totaled 97.59 billion yuan (about $13.61 billion) in January, up 27.5 percent from the previous month, according to the Xinhua News Agency.

Ling said some factors that contributed to the trend, including global cross-border investment, or global foreign direct investment, remain relatively sluggish. "The external environment is also severe and complex, with escalating geopolitical conflicts and a clear rise in unilateralism and protectionism," the vice minister said, noting that the impact from such factors on China attracting foreign investment cannot be underestimated.

New action plan

China on Wednesday unveiled a new action plan to stabilize foreign investment, with 20 specific measures in four aspects, including further expanding market access in various sectors and increasing efforts to promote investment. 

The action plan was devised by the Ministry of Commerce and the National Development and Reform Commission, according to a notice issued by the General Office of the State Council, Xinhua reported. 

Foreign investment is a key aspect of promoting high-standard opening-up, and plays a significant role in fostering new quality productive forces and advancing Chinese modernization, according to the action plan, which was formulated to ensure stable foreign investment in 2025.

Per the plan, China will support pilot regions in effectively implementing opening-up policies related to such areas as value-added telecommunication, biotechnology and wholly foreign-owned hospitals, providing whole-journey services for foreign-invested projects in these sectors.

The plan calls for efforts to expand the national pilot program to open the services industry further and promote the orderly opening-up of the biomedical sector.

Additionally, the plan calls for clarifying standards for the government procurement of domestic products, and for measures to ensure products produced by enterprises of different ownership within China participate equally in government procurement activities.

Speaking at Thursday's press conference, Ling said the action plan clearly requires that all measures and policies be implemented and effective by the end of 2025, which fully demonstrates the Chinese government's confidence and determination to maintain a high level of opening up and attract foreign investment. 

The action plan, which champions policies that are stabilizing foreign investment, reflects China's intention to offer a new, larger space for foreign-funded companies in China, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Thursday.

"This means we will adhere to our multilateral commitments, provide national treatment to foreign investors, create more possibilities for development, and address their concerns, all in the effort to drive the world toward a more stable and low-risk direction," Zhou further noted.

 Commenting on the plan, the European Union Chamber of Commerce in China (European Chamber) in Beijing said in a statement shared with the Global Times on Thursday that "the plan is seen as a continuation of the Chinese Governments pledges from recent years regarding improving the business environment for foreign investment."

The European Chamber said it looks forward to the release of supporting measures and timelines for implementation.

Promising prospects

The prospects for foreign investment in China in 2025 are promising, as reflected in various data, including recent reports from foreign chambers in China.

Over half of the surveyed US enterprises anticipated increasing investment in their China operations in 2025, read the China Business Climate Survey Report released by the American Chamber of Commerce in China in January. 

Meanwhile, a recent survey published by the British Chamber of Commerce in China on the sentiment of UK businesses operating in China suggests that their investment has remained stable, with 76 percent of the companies surveyed saying they would maintain or increase investment in China, Xinhua reported. 

As Chinese tech companies have made a series of significant breakthroughs in fields such as artificial intelligence, an increasing number of foreign financial institutions are focusing their attention on the Chinese market, the Economic Daily reported on Monday. Recently, companies such as Goldman Sachs, Deutsche Bank and HSBC have all voiced their optimism, expressing confidence in the development prospects of China's tech industry and in the performance of the Chinese market, the report said.

"The facts have proven that China is still a fertile ground for foreign investment and development, given the immense potential of the Chinese market … China's high-quality development and its policy of opening up provide many opportunities for foreign enterprises," Hu Qimu, deputy secretary-general of the digital-real economies integration Forum 50, told the Global Times on Thursday, adding that whether in the fields of new energy or artificial intelligence, China has the world's largest application scenarios.

"The country's industrial supply chain is relatively complete, and its enormous production capacity helps businesses better address cost issues ... This is a market that any company eager for development cannot afford to miss," Hu noted.

"While challenges persist in stabilizing foreign investment in the new year, including the uncertainty brought by unilateralism and trade protectionism, the unique and massive nature of China's market provides ample space for foreign investment to grow, as China strengthens foreign investment support measures, promotes fair competition, and provides a more predictable business environment," Zhou said.

With the strengthening and implementation of China's policies to stabilize foreign investment, "foreign investment will continue to stabilize and improve this year," the expert said.