Headlines
China moves to encourage foreign reinvestment as FDI slumps
Published by Global Banking & Finance Review®
Posted on July 18, 2025
2 min readLast updated: January 22, 2026
Global Banking & Finance Review®
Company
Published by Global Banking & Finance Review®
Posted on July 18, 2025
2 min readLast updated: January 22, 2026
China unveils new strategies to encourage foreign reinvestment amid a decline in FDI, offering incentives and simplifying processes to attract overseas investors.
BEIJING (Reuters) -China has unveiled new measures to encourage overseas investors to reinvest their profits within the country, its latest efforts to reverse a decline in foreign direct investment.
China has in recent months taken a series of measures to boost foreign investment, including opening more sectors to overseas investors, as rising trade tensions due to U.S. tariffs cloud the country's economic outlook.
Foreign direct investment in China totalled 358.2 billion yuan ($50 billion) from January to May, down 13.2% from the same period last year, data issued by the commerce ministry showed.
Foreign investors are encouraged to reinvest in China, including setting up new firms, increasing capital in existing companies and acquiring shares in Chinese firms, according to a notice issued by several government agencies.
The agencies include the state planner, the finance ministry and the commerce ministry and the central bank.
China has already introduced tax incentives to encourage foreign companies to reinvest profits earned in the country.
Local governments will establish project databases for reinvestment by foreigners and provide project services and support, according to the notice.
China will also support foreign investors in using flexible methods such as long-term leasing of industrial land, lease-before-transfer when reinvesting, to help reduce land costs, the agencies said.
To further ease investment processes, approval procedures for foreign shareholder loans and Panda Bonds required for eligible reinvestment by foreign firms will be simplified, according to the notice.
China's financial institutions have also been tasked with developing innovative products and services to support reinvestment by foreign enterprises, it said.
($1 = 7.1794 Chinese yuan renminbi)
(Reporting by Kevin Yao; Editing by Emelia Sithole-Matarise)
China has introduced new measures including tax incentives, project databases, and simplified approval processes to encourage foreign investors to reinvest their profits.
Foreign direct investment in China has declined, totaling 358.2 billion yuan from January to May, which is a 13.2% decrease compared to the same period last year.
Local governments will establish project databases for reinvestment and provide services and support to foreign investors looking to reinvest in China.
China will support foreign investors with flexible methods such as long-term leasing of industrial land and lease-before-transfer options to help reduce costs.
China's financial institutions are tasked with developing innovative products and services to support reinvestment by foreign enterprises.
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