New Policy Focus | An Analysis of the Action Plan for Consolidating, Stabilizing and Optimizing Foreign Investment Utilization

Recently, the Ministry of Commerce (MOFCOM), together with the National Development and Reform Commission (NDRC) and the Ministry of Finance, jointly issued the Action Plan for Consolidating, Stabilizing and Optimizing Foreign Investment Utilization(hereinafter referred to as the "Action Plan"). The document sets out 15 measures that make comprehensive efforts in five key areas: expanding market access, enhancing investment facilitation, strengthening investment promotion, improving services, and optimizing overall oversight and coordination.

A review of foreign investment policies in recent years reveals a clear evolution in policymaking thinking. Policies introduced in 2023 focused primarily on alleviating short-term operational pressures on foreign enterprises—such as cost reductions and hardship relief—with the aim of securing the baseline of existing foreign investment. In 2024, emphasis shifted to broadening pilot opening-up in finance and scientific innovation to unblock foreign investment and financing channels. In 2025, priority was given to strengthening safeguards for major foreign-invested projects and balancing regional disparities in attracting investment between eastern, central, and western China. The 2026 Action Plan centers on the concept of "consolidating, stabilizing, and optimizing" . Its focus has moved beyond merely pursuing the number of new projects: it seeks both to retain the operational footing of established foreign-invested enterprises (FIEs) and to channel foreign capital into high-value sectors such as high-end manufacturing, biomedicine, modern services, R&D, and innovation—reflecting a more pronounced feature of institutional opening-up.

Expanding Market Access—the Most Anticipated Highlight

Further opening of the services sector is a major highlight. The pilot scope for opening vocational training institutions, vocational schools, and high-level universities specializing in science, technology, agriculture, and medicine to foreign participation will be steadily expanded. The Beijing Comprehensive Pilot Program for Service Industry Opening-up will continue to pioneer opening policies in digital economy and healthcare. Meanwhile, mainland cooperation with Hong Kong and Macao in the services sector will be deepened, granting Hong Kong and Macao investors greater priority access.

Financial Sector Support Measures

Foreign financial institutions will be supported in legally conducting fund investment advisory business. Key foreign-invested enterprises will be granted cross-border financing facilitation quotas, and domestic banks will be guided to offer "document preparation on behalf of clients" settlement services to large FIEs. Preliminary communication procedures for FIEs listing on domestic capital markets will also be streamlined, broadening foreign financing channels in China across the board.

Incentives for the Biomedicine Industry

Detailed rules on segmented pharmaceutical manufacturing  — a key concern for multinational pharmaceutical companies — will be rolled out more quickly, and pilot zones for wholly foreign-owned hospitals are expected to expand. Innovative drugs and medical devices will be encouraged to be covered by commercial insurance. Industry matchmaking platforms will be established and offline retail channels for foreign pharmaceuticals opened up, tangibly reducing institutional costs in production and distribution for multinationals.

Facilitation Reforms for Day-to-Day Operations

Regulations on foreign mergers and acquisitions (M&A) of domestic enterprises will be revised to simplify approval processes and optimize capital payment rules. Foreign equity investment institutions may participate as strategic investors in securities issuance by listed companies in non-related industries. On the widely concerned issue of cross-border data flows, pilot free trade zones and service opening-up cities will introduce industry- and scenario-specific negative lists for cross-border data transfers. Unified national standards for identifying important data will also be issued for key sectors including industry, automotive, pharmaceuticals, and aerospace — striking a balance between data flow and security bottom lines.

Support for Reinvestment and R&D by Existing FIEs

The Action Plan reaffirms implementation of tax incentives for reinvestment using undistributed profits earned in China. More reinvestment projects will be eligible for inclusion in the national key foreign-invested project list, entitling them to full-process support. Policy backing for foreign-funded R&D centers will be enhanced — including simplified procedures for bringing in high-end foreign talent and duty/tax exemptions on imported research supplies — to encourage FIEs to establish innovation platforms in China and accelerate the commercialization of technological achievements.

A Shift from Extensive to Quality-Oriented Investment Promotion

The authorities will build a unified online comprehensive service platform under the "Invest in China" brand, integrating consultation and feedback functions to showcase market opportunities to global investors. A national positive/negative list for investment promotion will be introduced to regulate local government recruitment practices, requiring strict fulfillment of lawful policy commitments and establishing a sound evaluation mechanism for investment attraction performance.

Strengthened National Treatment for FIEs

Except where laws and regulations expressly provide otherwise or national security is involved, all industrial support policies apply equally to domestic and foreign enterprises. Fair competition reviews will be enforced in government procurement, public bidding, and university research procurement. Local campaigns to promote green consumption or develop international consumption center cities must not exclude foreign-branded products. A coordinated mechanism for handling online infringement against enterprises will be established to protect FIEs' online rights and interests. A closed-loop system — covering problem collection, resolution, and feedback — will be set up for operational pain points reported by FIEs, with typical resolved cases published in due course.

Regional Coordination and Digital Reporting

Eastern regions with strong investment appeal are encouraged to pair with border areas for collaborative industrial transfer and shared credit for attracted investment. Border economic cooperation zones may partner with domestic parks and overseas counterparts to build joint industrial platforms, facilitating FIEs' nationwide value-chain deployment. The foreign investment information declaration system will be fully optimized, with an improved information-sharing mechanism to reduce duplicate filings by enterprises.

Taken as a whole, the Action Plan sends an unequivocal signal: China's commitment to expanding high-level opening-up remains unchanged, and the institutional framework for attracting foreign investment continues to mature. For established FIEs, policies on profit reinvestment, R&D upgrades, cross-border data flow, and financing facilitation will help lower operating costs. For overseas enterprises planning China entry or expansion, newly opened pilots in services, biomedicine, and finance present fresh market opportunities. Foreign equity investment institutions, meanwhile, benefit from relaxed rules on M&A and strategic investment.

Sinobravo Policy Advisory Team will continue to monitor the release of detailed implementing rules and provide timely analysis. Stay tuned.

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