China’s Foreign Direct Investment in 2025: Trends, Policy Signals, and Outlook

uture remains relevant. The manufacturing sector attracted RMB 185.51 billion (US$26 billion) in utilized foreign investment, accounting for 24.8 percent of total FDI. Although this represents a decline in manufacturing’s share compared to the previous year, it still demonstrates the sector’s resilience and importance in China’s investment portfolio.

Despite global supply chain disruptions, rising production costs, and ongoing trade tensions, manufacturing FDI in China remains an essential component of the economy. The country’s established industrial base, skilled workforce, logistic infrastructure, and supportive policies continue to attract foreign investment in key manufacturing subsectors such as automotive, electronics, machinery, and chemicals. While some labor-intensive industries may be facing challenges, China’s focus on upgrading technology, innovation, and automation in manufacturing is driving a shift towards higher value-added production and sustainable growth.

Rise of high-tech FDI
One of the most notable developments in China’s FDI landscape in 2025 was the accelerating momentum in high-tech sectors. High-tech industries received RMB 241.77 billion (US$33.8 billion) in utilized foreign investment, accounting for 32.3 percent of total FDI. This marked a significant increase from the previous year and reflects the growing importance of technology and innovation in driving China’s economic transformation.

As China continues to prioritize technological self-reliance, innovation, and digitalization, foreign investment in high-tech sectors plays a crucial role in supporting these objectives. From artificial intelligence and biotechnology to advanced manufacturing and clean energy, foreign firms are contributing expertise, capital, and technology to help China achieve its goals of becoming a global technology leader. Through partnerships, joint ventures, and collaborations, foreign investors are actively participating in China’s innovation ecosystem and enhancing the country’s competitiveness in cutting-edge industries.

Looking ahead
China’s FDI performance in 2025 reflects a year of recalibration and adjustment amidst a complex global environment. While headline FDI value declined, the increase in new FIE establishments, the dominance of services, the stability of manufacturing, and the rise of high-tech sectors highlight the resilience and adaptability of foreign investors in China. Despite challenges, China remains an attractive destination for foreign capital, driven by market opportunities, regulatory reforms, and technological advancements.

As China navigates economic challenges, geopolitical dynamics, and policy shifts, foreign investors are likely to continue engaging with the Chinese market through strategic partnerships, innovative ventures, and sustainable investments. By aligning with China’s priorities in services, manufacturing, and high-tech industries, foreign firms can navigate uncertainties, leverage opportunities, and contribute to China’s ongoing economic transformation. Through collaboration and cooperation, China and foreign investors can build a mutually beneficial relationship that fosters innovation, competitiveness, and sustainable growth in the years to come.