On February 17, 2025, the State Council unveiled the 2025 Action Plan for Stabilizing Foreign Investment, a comprehensive policy framework featuring 20 measures across four critical areas: expanding market access, boosting investment promotion, enhancing the effectiveness of open platforms, and strengthening service guarantees. The plan aims to stabilize the scale and elevate the quality of foreign investment by broadening openness, refining policies, improving services, and guiding investment flows. 

The measures adopt a dual strategy of "Reduction and Addition" combined with institutional openness. On one hand, the plan focuses on reducing barriers to foreign investment. It proposes expanding pilot programs in sectors like telecommunications and healthcare, fully lifting foreign investment restrictions in manufacturing, broadening the scope for foreign investment, and ensuring the effective implementation of policies such as the Administrative Measures for Strategic Investment by Foreign Investors in Listed Companies. 

On the other hand, the plan emphasizes adding measures to enhance the business environment. It calls for continuous improvements to ensure national treatment for foreign-invested enterprises. Key initiatives include developing policies to encourage the reinvestment of profits earned in China, permitting foreign-invested holding companies to use domestic loans for equity investments, facilitating the establishment of multinational headquarters in China, streamlining foreign M&A rules and procedures, and lowering barriers for cross-border share swaps. Furthermore, the plan promotes a higher-level open economic system, supports foreign enterprises in expanding their investments in China, and advances systematic reforms to improve foreign investment management and promotion. 

The release of this plan conveys four key messages:

·         China reaffirms its unwavering commitment to its fundamental policy of openness.

·         China is sending a strong and positive signal to foreign investors about its continued efforts to expand openness.

·         China is resolute in its determination to attract and retain foreign investment.

·         China is actively refining its policy environment to create a more favorable landscape for foreign investment. 

Additionally, the plan reflects the Chinese government’s strategy of leveraging foreign enterprises and their supply chains to drive cross-border flows of capital, technology, raw materials, products, and services, fostering deeper integration into global industrial cooperation. By attracting foreign investment, China aims to harness global innovation resources, strengthen its industrial advantages, and achieve mutually beneficial outcomes through openness.

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