In recent years, due to factors such as the decline in the Chinese economy, increasing government control over foreign companies, and geopolitical instability, foreign capital has been accelerating its withdrawal from China. In February last year, the Chinese Communist Party introduced measures like the “Stabilization of Foreign Investment with 20 Articles” to attract foreign investment. However, the latest official data indicates that China’s actual use of foreign direct investment (FDI) has continued to decline.
On April 24th, data released by the Chinese Ministry of Commerce shows that from January to March 2026, the actual use of foreign capital nationwide amounted to 249.6 billion yuan, a decrease of 7.3% compared to the same period last year.
There were 13,987 newly established foreign-invested enterprises, representing a 11% increase compared to the previous year. The manufacturing and service industries attracted 71.46 billion and 174.6 billion yuan of investment, respectively.
Breaking it down by industry, the manufacturing sector utilized 714.6 billion yuan of foreign capital, while the service industry attracted 1,746 billion yuan. High-tech industries saw an actual use of foreign capital amounting to 1,027.3 billion yuan, with a year-on-year increase of 30.7%, accounting for 41.2% of the total foreign investment, a 12-percentage-point increase from the same period last year. Notably, foreign investment in research and design services, computer and office equipment manufacturing, and electronic and communication equipment manufacturing increased by 127.8%, 88.1%, and 23.8%, respectively.
Regarding the issue of “an increase in the number of foreign-invested enterprises but a decrease in the actual use of foreign capital,” Yin Min (pseudonym), a Beijing investment consultant, explained to Epoch Times reporters that the rise in the number of newly established foreign-invested enterprises is mainly due to lowered registration thresholds. Some companies have registered capital as low as tens of thousands of yuan, significantly lower than the multi-billion-dollar investment scale of large manufacturing companies in the past.
He emphasized that “an increase in quantity does not explain the problem; a decrease in funding indicates an issue with the economy.”
Furthermore, according to historical data from the Ministry of Commerce, in 2025, the actual use of foreign capital nationwide was 747.69 billion yuan, a 9.5% decrease compared to the previous year. In 2024, the total foreign investment dropped by 27.1% to 826.2 billion yuan, the lowest since 2016. In 2023, the foreign capital use decreased by 8% to 1,133.91 billion yuan, while in 2022, it increased by 6.3% to 1,232.68 billion yuan. In 2021, the actual utilization of foreign capital in China was 1,149.36 billion yuan, a 14.9% increase year-on-year.