Foreign investment inflows into China are beginning to show signs of recovery, even though they continued to decline during the first half of the year. The high-tech sector is now emerging as a major driver of growth.
In the first six months, foreign direct investment (FDI) fell by 5% to approximately $59.4 billion, according to the commerce department. This decline is less severe than the 8.6% drop experienced in the first five months of the previous year and significantly better than the 15.2% decrease seen last year.
The data for May and June both indicate a positive trend, with FDI inflows stabilizing and gradually improving. Officials noted that overall global investment remains weak this year due to unpredictable geopolitical and economic conditions, which has put some pressure on China’s ability to attract foreign capital. However, the general tone remains cautious but stable.
Investments in high-tech industries surged about 33% compared to last year, and technology’s share of the total foreign investment reached a record high of 42.4%. Meanwhile, the modern services sector accounted for 57% of the foreign direct investment.
The number of new foreign-invested companies rose by 5.3% over the half-year period, and roughly 4,800 existing companies increased their investments in China. This demonstrates continued confidence in China’s market economy, according to the vice minister of commerce.
By the end of last year, China’s accumulated foreign direct investment approached $4 trillion. Additionally, more than 530,000 foreign-invested businesses contribute roughly 2.5 trillion yuan (about $369 billion) annually in taxes.
The United Nations Conference on Trade and Development highlighted China’s resilience in attracting FDI amid challenging global conditions.
Looking ahead, China plans to expand pilot programs in key sectors such as telecommunications, biotechnology, foreign-operated hospitals, and vocational training. The government will also expedite updates to regulations governing foreign firms acquiring Chinese companies and introduce tax incentives for foreign investors who reinvest profits domestically.
Furthermore, efforts will be made to attract more FDI into central, western, and northeastern regions, as well as into emerging fields like humanoid robots and high-end shipping services.