Foreign investment increases as innovation drive deepens

China's improving innovation ecosystem, its vast market and more predictable policy environment are encouraging multinational companies to scale up investment and operations, cementing the country's role as a hub for advanced industries and global trade, said market observers and business executives.

They added that China's integrated industrial supply chains, ongoing industrial upgrading, stable market environment, relatively low energy costs and skilled labor force further enhance its competitiveness as a key base for foreign companies.

Peter Burnett, chief executive of the China-Britain Business Council, noted that for many multinational companies, "Innovated in China" is increasingly complementing "Made in China", as these companies move up the value chain and deepen local integration.

Wu Chun, managing partner for China at Boston Consulting Group, said that rapid growth in sectors such as green energy, biopharmaceuticals and electric vehicles is accelerating this shift, prompting global businesses to reassess growth areas and adjust their China strategies.

The trend is reflected in the latest figures. Data from the Ministry of Commerce shows that China's high-tech industries drew 63.21 billion yuan ($9.2 billion) in foreign direct investment in the first two months of 2026, up 20.4 percent year-on-year and accounting for 39.2 percent of the total FDI attracted by the country during this period.

Tan Kong Yam, a professor of economics at Nanyang Technological University in Singapore, said the appeal of China's vast market lies in its diverse demand structure, broad applications and fast-paced upgrading cycle.

He said the push to expand domestic demand is expected to direct incremental growth toward consumption upgrading and structural improvement, opening up opportunities for foreign companies in high-end brands, sustainable products and professional services.

Wang Jun, vice-minister of the General Administration of Customs, said the latest foreign trade data points to the same trend, highlighting sustained confidence among global businesses in the Chinese market and its growth prospects.

More than 6,200 foreign-invested enterprises were registered with customs authorities in the first quarter, while the number of such companies with import and export activity rose by more than 1,000 from a year earlier to reach 69,000.

These enterprises recorded 3.47 trillion yuan in trade between January and March, up 16.1 percent year-on-year, marking the eighth consecutive quarter of growth.

"Multinational companies are playing a key role in driving new quality productive forces, and their trade outlook in China remains strong," said Wang, adding that stable policy expectations and an open business environment are helping them select more trading partners and tap into more markets.

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said that after more than four decades of reform and opening-up, China's manufacturing sector, along with several other sectors, has reached a high level of openness, while significant growth potential remains in the services sector.

China's drive to expand services consumption will open up new opportunities for foreign companies to deepen their presence in areas such as healthcare, logistics, travel, certification and digital services, Bai said.

German testing, inspection and certification company Dekra Group is ramping up its presence in China. The company will open two new testing centers in Suzhou, Jiangsu province, and Chongqing in the second half of the year, expanding its services for automotive components, consumer electronics and other industries.

Kilian Aviles, executive vice-president of Dekra and head of its Asia-Pacific region, said that China has become a key growth engine for the company's regional operations, as further opening-up of the services sector creates a more favorable environment for global businesses.