In recent months, Chinese authorities have adopted a coordinated set of regulatory and policy measures aimed at reinforcing the country\u2019s attractiveness to foreign investors. These include the \u201cCatalogue of Industries Encouraging Foreign Investment (2025 Edition)<\/strong>\u201d, issued on 27 December 2025 and effective as of 1 January 2026, the \u201cMeasures to Encourage Foreign-Invested Enterprises to Expand Domestic Reinvestment<\/strong>\u201d (27 February 2026) adopted by the Shanghai Municipal Government, and the \u201cMeasures to Further Support Foreign-Invested R&D Centers in Enhancing Capabilities<\/strong>\u201d (27 February 2026) introduced by the Ministry of Commerce (MOFCOM).<\/p>\n These developments signal a clear policy shift. The focus is no longer limited to attracting new foreign capital, but increasingly extends to the retention and reinvestment of profits by foreign-invested enterprises already established in China, as a tool to support economic stability and strengthen the domestic industrial base.<\/p>\n The recent measures should be understood within the broader context of China\u2019s economic governance model, which is characterised by a close interaction between long-term strategic planning and targeted regulatory instruments.<\/p>\n In this framework, the Catalogue of Industries Encouraging Foreign Investment (2025 Edition) operates as a key implementation tool through which Chinese authorities actively steer foreign investment flows in line with national development priorities. Rather than merely identifying sectors open to foreign participation, the Catalogue specifically designates \u201cencouraged\u201d industries\u2014those aligned with China\u2019s industrial upgrading and economic transformation objectives. Based on the available sources, these include advanced manufacturing, innovative technologies, modern services, and sectors linked to sustainable development. The Catalogue provides a preferential regulatory environment for such activities, including tax incentives, administrative facilitation, and improved access to production resources. At the same time, China maintains a selective market access regime: while no detailed list of restricted sectors is provided in the sources, the continued existence of limitations\u2014typically addressed through separate instruments such as negative lists\u2014confirms a controlled opening of the market.<\/p>\n More broadly, the Catalogue, together with reinvestment incentives and R&D support measures, forms part of a structured policy framework in which overarching strategic documents\u2014such as China\u2019s Five-Year Plans\u2014define medium- to long-term economic priorities, while specific regulatory instruments operationalise those objectives. In this sense, foreign investment policy is not neutral, but actively directed toward sectors considered critical to national development.<\/p>\n Within this system, Chinese authorities deploy a range of policy tools, from regulatory facilitation and fiscal incentives to measures affecting capital allocation and talent management, in order to guide economic development and maximise the contribution of foreign investment to domestic growth.<\/p>\n The measures analysed above confirm China\u2019s intention to remain a leading destination for foreign investment, while progressively shifting toward a model that prioritises the quality, sustainability, and local integration of investments.<\/p>\n In this evolving regulatory landscape, instruments such as the 2025 Catalogue, together with local reinvestment policies and innovation-driven initiatives, create a more structured and policy-oriented environment. Foreign investors are therefore required to align their strategies with China\u2019s industrial priorities and adapt to an increasingly sophisticated and targeted regulatory framework.<\/p>\n","protected":false},"excerpt":{"rendered":" Introduction In recent months, Chinese authorities have adopted a coordinated set of regulatory and policy measures aimed at reinforcing the country\u2019s attractiveness to foreign investors. These include the \u201cCatalogue of Industries Encouraging Foreign Investment (2025 Edition)\u201d, issued on 27 December 2025 and effective as of 1 January 2026, the \u201cMeasures to Encourage Foreign-Invested Enterprises to […]<\/p>\n","protected":false},"author":3,"featured_media":47620,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[203],"tags":[],"class_list":["post-47619","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insights"],"acf":[],"yoast_head":"\nLegal framework<\/h2>\n
Relevant measures<\/h2>\n
\n
Conclusion<\/h2>\n