Economy

Why is investing in China so vibrant?

2026-02-26   

As the spring chill sets in, the "investment heat" of the Chinese market has quietly heated up: from the roaring of machines in Zhuhai Economic Development Zone to the billion yuan cooperation with Guangzhou's strong sense of technology; From the crisp signing sound of the Suzhou Wuzhong project to the resounding hammer of the industrial land auction in Jiujiang, Foshan... one foreign-funded project after another has taken root and blossomed on the land of China. Against the backdrop of complex and ever-changing global economic conditions and increasing uncertainty, foreign-funded enterprises are casting a vote of trust in the Chinese market through practical actions. This land full of opportunities is responding to this trust that transcends mountains and seas with a broad and open institutional mindset. Since the beginning of the year, "stabilizing foreign investment" has become a high-frequency term in documents issued by relevant national departments and local governments. Before and after the Spring Festival, there were frequent good news from foreign investment projects, and the pace of capital increase and production expansion was vigorous. The determination of multinational enterprises to layout the Chinese market became increasingly firm. Sheng Lei, Deputy Director of the Investment Research Institute of the National Development and Reform Commission, told reporters that foreign-funded enterprises are optimistic about the Chinese market mainly because of the stable and positive development of China's economy and the continuous expansion of high-level opening-up to the outside world. With the implementation of more measures to stabilize foreign investment, the confidence of foreign-funded enterprises in investing in China will be further enhanced. Luozi has a voice: At the beginning of the new year, new foreign-funded projects have been launched and put into operation, with a high concentration of key projects. On January 22nd, German materials giant Covestro announced that its new thermoplastic polyurethane (TPU) production base located in Zhuhai Economic Development Zone has officially started production. The initial investment of the project amounts to tens of millions of euros and will achieve an annual production capacity of approximately 30000 tons to meet the growing demand for this multifunctional material in industries such as IT, automotive, and footwear. Some new projects have successfully signed contracts and acquired land. On February 5th, the People's Government of Baiyun District, Guangzhou and STI Corporation, a well-known semiconductor equipment enterprise in South Korea, officially signed an investment agreement at the Guangzhou Municipal Government. According to the agreement, STI Corporation will invest in the construction of a power semiconductor intelligent manufacturing base in Baiyun District; The total investment of the project is about 12.4 billion yuan. On February 6th, the signing ceremony for the capital increase and expansion project of British funded enterprise McGway was held in Wuzhong District, Suzhou City. This time, McGway will increase its total investment by 160 million yuan to build a high-end electronic product and automotive label research and production base project. After the project is completed and put into operation, it is expected to increase its annual output value by 300 million yuan. On February 24th, United Minerals (Guangdong) Co., Ltd., a wholly-owned subsidiary of United Minerals Limited, successfully won the bid for 45 acres of industrial land in Lingang International Industrial Community, Jiujiang Town, Nanhai District, Foshan City. It is reported that the total investment of the project is 200 million yuan, and it is planned to introduce advanced production lines and automatic batching systems. Yu Xiaoming, Senior Investment Advisor of Shaanxi Jufeng Investment Information Co., Ltd., stated in an interview with reporters that there are several new trends in foreign investment in China: firstly, foreign enterprises actively embrace traditional Chinese culture and seize investment opportunities through cultural nodes; Secondly, the trend of integrated development with local industrial and supply chains is becoming increasingly evident, and more and more foreign-funded enterprises are increasing capital and expanding production from the perspective of optimizing industrial layout; Thirdly, there is an increasing emphasis on technological and industrial innovation. Moderate openness: The institutional dividend continues to 'release energy', and the construction of foreign investment projects is flourishing, with the steady promotion of institutional openness behind it. From the continuous reduction of the negative list for foreign investment access to the continuous expansion of the catalog of industries that encourage foreign investment; From the normalized operation of the roundtable conference for foreign-funded enterprises to the precise service of key foreign-funded project work teams... a series of "combination punches" to stabilize foreign investment have made the attractiveness of the Chinese market stronger and the golden signboard of "investing in China" more dazzling. Policy measures are still being continuously intensified. On January 9th, the official website of the Ministry of Commerce publicly released the "Comprehensive Pilot Task for Expanding the Opening up of the Service Industry in 9 Cities including Dalian", further promoting the acceleration and strengthening of the opening up of the service industry; The National Business Work Conference held on January 10-11 proposed to "shape new advantages in attracting foreign investment" and "improve the service guarantee system for foreign investment"; On February 5th, He Yadong, spokesperson for the Ministry of Commerce, stated that during the 15th Five Year Plan period, China will steadily move towards high-quality development, continue to expand high-level opening up to the outside world, firmly uphold the multilateral trading system, strengthen equal and mutually beneficial economic and trade relations with other countries, and provide good expectations for the long-term development of foreign-funded enterprises in China. Institutional openness is an important symbol of high-level opening-up to the outside world. Associate Professor Liu Chunsheng of Central University of Finance and Economics told reporters that steadily expanding institutional openness is conducive to deepening international scientific and technological cooperation, fully utilizing global high-quality resources, accelerating the construction of an open innovation ecosystem with global competitiveness, thereby further enhancing foreign investment confidence and creating a favorable environment for the development of new quality productivity. Local relevant departments are also accelerating the implementation of practical measures. On January 9th, the General Office of the Chongqing Municipal People's Government publicly released the "Implementation Plan for Promoting the Construction of the Air Silk Road in Chongqing", emphasizing "greater efforts to attract and utilize foreign investment, and explore international industrial cooperation with cities jointly building the Air Silk Road". On February 3rd, the Shandong Provincial Foreign Investment Project Scheduling Meeting was held in Jinan. The meeting proposed that 2026 is the starting year of the 15th Five Year Plan, and it is of great significance to do a good job in high-level utilization of foreign investment; The business system of the whole province should further explore increment, focus on key industries, highlight key countries and regions, strengthen precise investment promotion, and continuously polish the "Sincere Shandong, Near Joy, Far Away" investment promotion brand. In addition, Shanghai, Shanxi Province, Guangdong Province, Jiangsu Province and other places have recently deployed foreign investment work for 2026. Dong Qingma, Vice Dean of the China Institute of Finance at Southwest University of Finance and Economics, stated in an interview with reporters that the efforts made by various regions to stabilize foreign investment reflect their determination to promote high-level opening up to the outside world. Collaborative cooperation at the national and local levels can more effectively refine and implement specific measures to stabilize foreign investment, innovate work methods, strengthen factor support in investment promotion, rights protection, service guarantee, and other aspects, thereby effectively boosting foreign investment confidence. In the future, there will be plans to pursue high-quality development in both directions. According to data from the Ministry of Commerce, by 2025, 70392 foreign-invested enterprises will be newly established nationwide, a year-on-year increase of 19.1%; The actual amount of foreign investment used was RMB 747.69 billion, a year-on-year decrease of 9.5%; The actual use of foreign investment in high-tech industries was 241.77 billion yuan, among which the actual use of foreign investment in e-commerce services, medical equipment and device manufacturing, and aerospace and equipment manufacturing increased by 75%, 42.1%, and 22.9% respectively. On the one hand, there has been a significant increase in the number of newly established enterprises and frequent highlights in attracting investment to high-tech industries. On the other hand, the actual amount of foreign investment used has declined - this "mixed bag" phenomenon reflects the complex situation of attracting foreign investment in China at present. The situation of attracting foreign investment in our country presents the characteristics of both overall pressure and quality improvement, which is the result of the combined effect of global capital restructuring and domestic industrial upgrading. ”Professor Lv Yue from the National Institute of Opening up at the University of International Business and Economics told reporters that the weak global economic recovery, shrinking profits of foreign-funded enterprises, and cautious international capital flows, coupled with the previous high base effect, have collectively compressed the current scale of capital inflows, ultimately resulting in a decrease in the actual amount of foreign investment used. However, this decline is a periodic fluctuation rather than a trend reversal. At the same time, the increase in the number of newly established foreign-invested enterprises and the significant increase in the actual use of foreign capital in some high-tech industries indicate that foreign-funded enterprises still regard China as an important strategic market, and overall, the technological content of foreign-funded projects is improving. Against the backdrop of continuously optimizing the structure of attracting foreign investment, how can we better unleash the attractiveness of the Chinese market and further stimulate foreign investment enthusiasm? Lv Yue believes that the key lies in stabilizing expectations, enhancing the level of institutional openness, and strengthening the ability of high-end industries to connect with the global value chain. All parties should enhance predictability through high-level institutional openness, continuously improve the market access system, and enhance the consistency and precision of policy implementation; Shaping new advantages for attracting foreign investment through industrial transformation and upgrading, building an industrial ecosystem around digital economy, green and low-carbon, biomedicine, and high-end equipment manufacturing, and enhancing the stickiness of high-quality foreign investment; By integrating the market to amplify economies of scale, promoting the construction of a unified national market, facilitating the smooth flow of factor resources across regions and fields, and enabling foreign-funded enterprises to integrate their businesses on a larger scale. (New Society)

Edit:hechuanning Responsible editor:susuiyue

Source:Securities Daily

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