Affected by multiple factors such as geopolitical conflicts and slow economic recovery, global cross-border investment continues to be sluggish. China’s economy is shifting from high-speed growth to high-quality development, which puts higher demands on the quality and structure of foreign investment. At the same time, efforts are made to solve the practical problems encountered by foreign-funded enterprises in their investment and operation in China and further optimize the business environment.
On February 10th, 2025, the executive meeting of the State Council deliberated and adopted the Action Plan for Stabilizing Foreign Investment in 2025 (hereinafter referred to as the Action Plan), aiming to further increase the attraction of foreign investment, always adhere to the basic national policy of opening to the outside world, and strive to provide a stable and predictable investment environment for foreign investors.
This paper makes an in-depth interpretation of the Action Plan, analyzes its core contents and highlights, and discusses the latest trends of Shanghai’s foreign investment policy under the guidance of this policy, so as to provide reference for foreign investors.
The Action Plan puts forward 20 policy initiatives from four aspects, which are rich in content covering multiple aspects.
Firstly, with regard to the orderly expansion of independent opening up, the Action Plan proposes a series of measures, such as expanding the opening-up pilot projects in the fields of telecommunications, medical care and education, accelerating the comprehensive pilot project of expanding the opening up of the national service industry, further reducing the negative list of market access, continuously expanding the institutional opening-up of rules, regulations, management and standards in the Pilot Free Trade Zone, and improving the development level of export-oriented economy in national economic and technological development zones.
Secondly, in order to strengthen policy support, the Action Plan proposes to guide more high-quality foreign investors to invest in China’s listed companies for a long time, study and formulate policies and measures to encourage foreign-funded enterprises to reinvest in China, expand the scope of industries to encourage foreign investment, cancel the restrictions on foreign-invested companies to use domestic loans, facilitate the accelerated listing of innovative drugs, and support foreign-funded enterprises to participate in the pilot production of biological products in stages.
At the same time, it is necessary to carefully design and implement the series of activities of “Investing in China”. The Action Plan proposes to give full play to the mechanism of bilateral investment promotion working groups with relevant countries, carry out overseas investment promotion activities in a coordinated manner between the central and local governments, optimize the relevant regulations for foreign investment in establishing investment companies, optimize the rules and procedures for foreign mergers and acquisitions, and support foreign-funded enterprises to participate in the new industrialization process.
In addition, to effectively solve the concerns of foreign-funded enterprises, the Action Plan proposes to include more foreign-funded projects in the list of major foreign-funded projects and key foreign-funded projects, clarify the standards for government procurement of domestic products as soon as possible, optimize the procurement of drugs, continue to steadily expand the scope of unilateral visa-free countries, hold targeted bank-enterprise docking activities, and improve the level of trade facilitation of foreign-funded enterprises.
The “Action Plan” released a positive signal of China’s further opening up, and put forward measures such as speeding up and intensifying the comprehensive pilot work of expanding and opening up the national service industry, further reducing the negative list of market access, and improving the development level of export-oriented economy in national economic and technological development zones.
As the forefront of China’s reform and opening up, Shanghai has always attached great importance to attracting foreign investment. In the implementation of the Action Plan, Shanghai took active actions. On the afternoon of February 25th, Shanghai held a work dispatch meeting for all districts of the foreign investment promotion co-ordination mechanism (February).
In view of Shanghai’s foreign investment promotion and business foreign affairs, He Dongbin, deputy director of the Municipal Commission of Commerce, suggested: First, stick to the goal and not relax. At present, the situation of attracting foreign investment is still grim. To achieve the goal of the first quarter, all districts need to bite the quarterly goal set at the beginning of the year and not relax. Pudong New Area, Jinshan District and other potential regions should make more contributions. Second, pay close attention to the transformation of contractual foreign investment. At present, the data of contracted foreign investment has started well. It is necessary to grasp the changing characteristics of the situation in key countries and regions, find opportunities in times of crisis, tap favorable factors, plan visiting groups in advance, and actively participate in major international forums. Third, dig deep into new foreign investment. In view of the dual needs of overseas capital appreciation and hedging, each district should sort out the list of projects that can be used for foreign investment in land transfer, property sale, equity transfer, overseas financing reinvestment, reinvestment of existing profits, opening up new areas, and headquarters to improve efficiency and reduce costs, and do a good job in evaluating the effectiveness of foreign investment promotion and continuously improve the evaluation system. Fourth, expand the project information channels. By increasing the visits of leading enterprises in urban areas, high-level meetings, the recommendation of global partners and intermediaries, and the cooperation of international high-level exhibitions and forums, we will expand the sources of project information and continuously strengthen the cultivation of export-oriented investment talents.
Previously, all districts in Shanghai actively responded to the national policy of stabilizing foreign investment and issued relevant implementation measures and opinions, attracting foreign investment and promoting regional economic development through financial incentives and policy support. For example, Yangpu District vigorously introduces and cultivates foreign-funded headquarters enterprises and supports enterprises to participate in regional innovation and development. Qingpu District focuses on promoting the steady growth of foreign trade scale, promoting the innovation and development of foreign trade, and supporting the development of diversified markets. The introduction of these policies will help to enhance the investment confidence of foreign-funded enterprises in Shanghai and promote the high-quality development of Shanghai’s economy.
The Action Plan for Stabilizing Foreign Investment in 2025 is an important measure for China to open wider to the outside world and attract foreign investment under the new situation. Shanghai responded positively, issued supporting policies, attracted foreign investment and promoted regional economic development through financial incentives and policy support. These policies focus on opening wider to the outside world, promoting foreign trade, supporting innovation and optimizing services, and providing more opportunities and convenience for foreign-funded enterprises. China will continue to open up, share opportunities with global investors and create a better future.
Preface As the leader of China’s economic development and the forefront of reform and opening up, Shanghai has always attached great importance to attracting foreign investment. Recently, the Shanghai Government deliberated and adopted a series of policy measures to promote the sustained economic recovery, and at the same time actively responded to the Action Plan
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