Amid China’s economic downturn, escalating government control, geopolitical instability, and other factors, foreign investment continues to withdraw from the mainland. The latest official data shows that in the first 10 months of this year, the actual use of foreign investment amounted to 621.93 billion yuan (RMB), a decrease of 10.3% compared to the same period last year.
On November 21st, the Chinese Ministry of Commerce released data indicating that from January to October 2025, the number of newly established foreign-invested enterprises nationwide reached 53,782, an increase of 14.7% compared to the previous year. However, the actual use of foreign investment was 621.93 billion yuan, down by 10.3% year-on-year.
In terms of industries, the actual use of foreign investment in manufacturing was 161.91 billion yuan, in the service industry was 445.82 billion yuan, and in high-tech industries was 192.52 billion yuan. Among them, the actual use of foreign investment in e-commerce services, medical equipment manufacturing, and aerospace equipment manufacturing showed some growth.
Regarding the issue of “an increase in the number of foreign-invested enterprises but a decrease in the actual use of foreign investment,” Yin Min, an investment consultant in Beijing, explained to a reporter that the increase in the number of newly established foreign-invested enterprises is mainly related to the lower registration thresholds. Some companies have registered capital as low as tens of thousands of yuan, far below the investment scale of billions in the past in large manufacturing industries.
He emphasized, “An increase in numbers does not explain the issue; a decrease in funds signifies economic problems.”
Scholar Zhao Jianmin from Shanxi added, “Currently, the registration process for foreign investment is fast. Companies register first to retain market options but may not necessarily invest capital. This behavior is statistically counted as the establishment of new foreign enterprises but does not reflect actual investment flow.”
Chinese issues expert Wang He stated that there are structural problems in the CCP’s foreign investment statistics. “The increase in the number of foreign-invested enterprises but a decrease in the actual use of foreign investment indicates a trend towards smaller-scale foreign investment.” Previously, foreign investment in China often involved tens of billions or hundreds of billions, but now it predominantly consists of small investments by small and medium-sized enterprises.
He further pointed out that there is a significant amount of “false foreign investment” in China’s disclosed foreign investment data. “Approximately 70% of China’s foreign investment comes through Hong Kong, and at least 40% of the investment from Hong Kong is ‘false foreign investment.’ These false investments are made by Chinese companies registering overseas and then reinvesting in China. If these are excluded, the actual scale of foreign investment would be much lower than official statistics suggest.”
Furthermore, a comparison of Ministry of Commerce’s data from recent years reveals a significant withdrawal of foreign investment from the Chinese market.
In 2024, the actual use of foreign investment nationwide was 826 billion yuan, a 27.1% decrease compared to the previous year, marking the lowest since 2016. In 2023, it was 1,133.91 billion yuan, an 8% decline; in 2022, it was 1,232.68 billion yuan, a 6.3% increase; and in 2021, it was 1,149.36 billion yuan, a 14.9% increase.