The Chinese government 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 (MOFCOM) and the National Development and Reform Commission (NDRC) that was unveiled on February 18, China will expand the range of industries in which foreign enterprises can invest and facilitate their financing in the country. One example is the orderly opening up of the biomedical sector and supporting qualified foreign companies’ participation in the production of biological products. The culture and education sectors will also be further opened according to the plan, without giving 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.
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. 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.
China recorded a net inflow of foreign investment of USD4.5 billion last year, down 89% from 2023, according to the State Administration of Foreign Exchange (SAFE). 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 U.S. dollars, the South China Morning Post reports.
