Once motivated by the opportunity to save costs, investors now see the chance to add value, pushing a transition from "manufacturing in China" to "creating in China."
According to a report on the 2026 foreign direct investment confidence index released by global management consulting firm Kearney, China has retained the top position for the third consecutive year among emerging markets. The International Monetary Fund and investment banks Morgan Stanley and Goldman Sachs have increased the level of optimism in their forecasts for China's economic growth in 2026, believing China will remain a crucial engine of global economic growth.
Paid-in capital in China's hi-tech industries during the January-April period this year increased 20.3 percent year on year, accounting for 40.4 percent of the total. Paid-in capital in research and development (R&D) and design services saw an even higher year-on-year increase of 108.4 percent. Cases such as Volkswagen establishing its first integrated R&D base outside Germany in Hefei, Anhui Province, and U.S. pharmaceutical giant Eli Lilly and Company planning to invest $3 billion in China over the next decade indicate many foreign investors' readiness to leverage the nation's rich reservoir of skilled professionals and comprehensive industrial ecosystem to drive innovation in frontier technologies.
As China has removed all market access restrictions for foreign investors in the manufacturing sector, sectors such as electronics and communication, high-end chemical engineering and medical devices continue to attract heavy investment. At the same time, China is expanding service sector market access, with pilot programs for opening up in areas such as value-added telecommunications, biotechnology, wholly foreign-owned hospitals and finance continuously advancing. Faced with a complex geopolitical environment and the ongoing reshaping of global liquidity, international capital is finding a safe harbor in China to hedge against external uncertainties.
The new Catalogue of Encouraged Industries for Foreign Investment, effective February 1, aims to attract greater foreign investment in advanced manufacturing, modern services, hi-tech industries, energy conservation and environmental protection. The government is also addressing problems encountered by foreign-invested enterprises through regular roundtables, honoring national treatment and guaranteeing the free repatriation of profits. To invest in China means to invest in the future, and to invest in China means to invest in long-term certainty. For international capital, this logic has not changed, but rather will be continuously strengthened throughout the process of China's further opening up.
