High-tech boom helps attract foreign investment

People view a vehicle at the Smart Vehicle Chain area of the third China International Supply Chain Expo (CISCE) in Beijing, July 16, 2025. [Photo/Xinhua]

This is an editorial from China Daily.

Years of efforts aimed at promoting the country's opening-up and continuously expanding market access for foreign enterprises have gradually paid off. Foreign-funded enterprises now contribute one-third of China's foreign trade, one-fourth of its value-added industrial output, and one-seventh of its tax revenues, and have created more than 30 million jobs over the past five years. It is little wonder therefore that the government should highly value foreign direct investment and always try its best to improve the business environment for foreign capital, so as to make the country a safe and promising destination for foreign investors.

The country's 14th Five-Year Plan (2021-25) set the target of attracting a total of $700 billion in foreign investment, with remarkable progress to be made in both the quantity and quality of utilized foreign investment. Despite the challenges posed by the rise of protectionism and unilateralism in recent years, the utilized foreign investment in China reached $708.73 billion by the end of June, suggesting the country has already achieved its five-year foreign investment target, ahead of schedule.

Statistics from the Ministry of Commerce released on the weekend also indicate that in the first half of this year the number of newly established foreign-invested companies increased by 11.7 percent year-on-year to 30,014, as the country continues to attract foreign capital into high-tech industries such as artificial intelligence, e-commerce, pharmaceuticals and high-end manufacturing.

The country's high-tech sector has become a major magnet for foreign capital thanks to its immense potential, with the percentage of utilized foreign investment in China's high-tech sector rising from 28.3 percent of the total in 2019 to 37.4 percent in 2023. In the first half of this year, foreign investment in e-commerce services alone recorded a nearly 130 percent year-on-year surge.

The development of a highly advanced innovation ecosystem in China has prompted a lot of multinationals to expand their investment in the sector in light of the country's forward-looking strategy. Take BMW for example. The German auto giant plans to establish its first China-based information technology research and development center in Nanjing, which will represent a huge expansion of the company's digital capabilities. The center is set to be BMW's largest IT R&D hub in Asia, and it is designed to strengthen the automaker's global production, sales and after-sales systems through digital solutions rooted in China's rapidly evolving tech landscape. Explaining the decision, Franz Decker, president and CEO of BMW Brilliance Automotive, said during the signing ceremony with the local government on Friday that China "demonstrates remarkable vitality in building a thriving ecosystem for digital innovation".

The third China International Supply Chain Expo, which concluded on Sunday in Beijing, has earned a reputation for being a showcase for technological innovation and China's new quality productive forces. The expo highlighted how the country has embraced an innovation-driven development strategy in pursuit of high-quality development, which is expected to bring immense business opportunities for foreign companies. "Here in China ... the technology adoption is so fast," said Jensen Huang, Nvidia CEO, during an interview on the sidelines of the expo, citing how China's innovative applications are setting global trends. "The supply chain of China is a miracle. It is the largest and most complex in the world ... built on deep technology, AI and software."

There have been some pointing to the actual use of FDI in China dropping 15.2 percent in the January-June period from a year earlier. Yet it should be noted that was amid a global decline in foreign investment, and the total volume of utilized FDI in China is 423.23 billion yuan ($58.9 billion), which remains significant. The decline can be attributed to the high comparison base last year. Any attempt to hype that foreign investment is leaving the country is out of ill intent.

In the past five years, the rate of return on FDI in China, at nearly 9 percent, still ranks among the highest around the world. It is the consensus among foreign investors that China remains an attractive destination for investment, not only because of its huge growth prospects, but also due to consistent government support aimed at enabling foreign-funded enterprises to achieve even greater success, as exemplified in an action plan that China released early this year to stabilize foreign investment.

No matter how the external environment may evolve, China remains firmly committed to high-standard opening-up and always welcomes foreign companies to keep investing in China and explore the Chinese market to enjoy the country's development dividends and progress together.