New plan to attract foreign investment reinforces market reality on the ground: China Daily editorial

This month, China is hosting a succession of international business gatherings that collectively reflect the importance the world's corporate sector attaches to the Chinese market.

The China International Supply Chain Expo, which opened in Beijing on Monday, has attracted some 700 major companies and industry groups from 85 countries, regions and international organizations. In Dalian, Liaoning province, the ongoing Summer Davos has drawn over 1,700 global executives, researchers and policymakers from more than 90 countries and regions. And in Qingdao, Shandong province, the Qingdao Multinationals Summit recently wrapped up with 357 multinational corporations — 105 of them Fortune Global 500 companies — from 44 countries and regions.

These are not the numbers to expect if global businesses were genuinely preparing to leave China as some allege. Last year, a total of 70,392 new foreign-invested enterprises were established across China, marking a 19.1 percent increase compared with 2024.

The Western claims that China is an "economic threat" — whether "overcapacity", "subsidies", "currency manipulation" or "trade imbalances" — are not new. They are simply recycled in search of listeners. But they have never gained real traction, because China's economic rise has delivered tangible benefits to the world, including developed economies, in the form of stable supply chains, more consumer options and a superlarge market that have created healthy profits for multinationals.

To deflect attention from their own shortcomings in addressing domestic economic challenges in these turbulent times, some Western politicians have resorted to hyping up a "China Shock 2.0" narrative targeting China's "new three" — new energy vehicles, lithium-ion batteries and photovoltaic products.

Yet reality tells a different story — multinationals are still doubling down on their operations in China. The trade data of recent months reinforce this reality. China's foreign trade has continued to demonstrate resilience. Its foreign trade in yuan-denominated terms grew 16.9 percent year-on-year in May. In the process, foreign-invested enterprises remain important contributors to exports, technological innovation and industrial upgrading.

And China's new action plan on foreign investment, rolled out on Monday with fresh incentives for global capital and talent, will only drive a deeper wedge between the China-bashers' rhetoric and the market reality on the ground.

The plan expands market access, addresses practical concerns of international investors and signals that China intends to attract foreign investment through a combination of market size, complete industrial system, good business environment and institutional openness. The plan also calls for faster revisions to regulations governing foreign mergers and acquisitions, smoother cross-border data transfers, stronger support for foreign-funded research and development centers, tax incentives for reinvested profits and enhanced services for major investment projects.

The contradiction between the Western political rhetoric and business reality is getting harder to ignore — especially in the European Union, which is mulling restrictive trade measures against China in the name of boosting its own competitiveness.

EU companies remain deeply embedded in China's industrial ecosystem and European businesses acknowledge the immense cost of "de-risking" from Chinese manufacturing networks. Supply chains built over decades cannot simply be replicated elsewhere by political decree.

The EU says it backs globalization, yet when it comes to China, the bloc acts as if it's a zero-sum game — where China's gain would be Europe's loss. In fact, China-EU economic ties are mutually beneficial. If the China-bashing politicians in Brussels truly want to fix the bloc's competitiveness problem, they should look at home — not cast blame elsewhere.

China's competitive strengths did not emerge from what the China naysayers claim. They stem from innovation, competition and the long-term hard work of the Chinese people. Against this backdrop, reports that Chinese Commerce Minister Wang Wentao is to visit Brussels assume added significance. Both sides have practical incentives to engage in dialogue and continue cooperation.

China's new action plan on foreign investment clearly indicates that the world's second-largest economy welcomes multinational companies by creating new opportunities in finance, health care, education, biotechnology and advanced manufacturing. For global businesses, the choice remains straightforward. Markets, efficiency and growth opportunities matter more than political slogans in some Western capitals. And for all the political noise surrounding "de-risking", the world's boardrooms appear to have already made their decision.