Policies keep nation's foreign capital appeal buoyant

China's appeal as a destination for foreign capital is set to strengthen further as policymakers move to stabilize expectations, while the country's vast market and accelerating industrial upgrading continue to reinforce its long-term attractiveness amid an uncertain global backdrop, said market observers and business executives.

They noted that beyond major commitments to opening-up, a combination of resilient domestic demand, ongoing manufacturing transformation and more predictable policy support is increasingly translating into concrete advantages for multinational companies.

The annual Central Economic Work Conference, held earlier this month in Beijing, emphasized the need to steadily advance institutional opening-up, expand self-initiated opening-up in the service sector in an orderly manner, and make solid progress in developing the Hainan Free Trade Port.

China has also released the 2025 edition of its Catalogue of Encouraged Industries for Foreign Investment, which will take effect on Feb 1. The updated catalog contains 1,679 items, marking a net increase of 205 entries from the 2022 version, alongside revisions to 303 items, the Ministry of Commerce announced on Wednesday.

A commerce ministry spokesperson said the changes aim to channel foreign investment into advanced manufacturing, modern services, high technology and green sectors, while encouraging inflows into central, western and northeastern regions.

Senior executives of multinational companies expressed optimism over the investment prospects of the Chinese market, citing supportive government policies to boost domestic demand and the potential of the innovation-driven growth of the Chinese economy.

Anna An, president of the China unit of Henkel, a German industrial and consumer goods group, said the priorities set out at the annual Central Economic Work Conference — including expanding domestic demand, boosting consumption, innovation-driven growth and the guiding role of the dual-carbon goals — clearly map out the path to high-quality development.

"We continue to see the Chinese market demonstrating strong resilience and solid long-term growth potential," An said, adding that the company has put several innovations and manufacturing facilities into operation across the country, especially in the Yangtze River Delta region, in 2025.

As part of its continued commitment to the Chinese market, Milliken & Co, a United States specialty chemical and performance materials company, will strengthen its technical, supply chain and customer support capabilities in China, while advancing its "localization — China serving Asia" framework to enhance operational agility and service efficiency.

"China is not only one of the world's largest coatings markets but also one of the most dynamic hubs for green technology innovation," said Simon Oram, vice-president of Milliken's coating additives business, noting that the group will broaden its support beyond traditional industrial coatings to include adhesives, inks, composites and other emerging segments in the country.

Through the expansion of its Shanghai technical service center, Oram said the US company aims to enhance formulation development and customer co-creation to tackle practical industry challenges.

When China's Hainan Free Trade Port launched its island-wide special customs operations last week, Germany's Siemens Energy AG also established a new branch and broke ground on a gas turbine assembly base and service center in Danzhou, Hainan province.

Aligned with vision

Joern Schmuecker, Siemens Energy's senior vice-president for gas service, said these moves align with the Hainan FTP's vision of becoming a new hub for openness and international cooperation, and these facilities are expected to be operational in 2027.

The corporate sentiment is in line with the latest data. Foreign direct investment inflows in China saw a notable rebound in November, surging 26.1 percent year-on-year, data from the Ministry of Commerce showed.

Chen Jianwei, a researcher at the University of International Business and Economics' Academy of China Open Economy Studies in Beijing, said China's continued easing of market access and improvements to the business environment have helped strengthen policy and regulatory predictability for global businesses.

Zhang Jianping, deputy director of the academic committee at the Beijing-based Chinese Academy of International Trade and Economic Cooperation, said, "As the US dollar enters an easing cycle, China-US economic and trade frictions are showing signs of easing, while a firmer renminbi is improving sentiment."

Zhang said these factors are helping to revive global capital flows and gradually bring China's underlying appeal back into focus.

China's actual utilized foreign capital totaled 693.18 billion yuan ($98.45 billion) in the first 11 months of 2025, while high-tech industries utilized 221.26 billion yuan in foreign capital, with notable growth seen in sectors such as e-commerce services, medical equipment and instrument manufacturing, and aerospace equipment manufacturing, according to the Ministry of Commerce.

zhongnan@chinadaily.com.cn