FDI stabilizes as high-tech sector surges

Foreign direct investment in China showed further signs of stabilization in the first half of 2026, with inflows posting year-on-year growth in both May and June and the overall decline narrowing sharply, underscoring improving investor confidence despite global economic uncertainties, said officials, experts and executives.

Data from the Ministry of Commerce shows that China's actual use of FDI totaled 402.14 billion yuan ($59.3 billion) in the first half of this year, with the decline narrowing by 10.2 percentage points compared with the same period last year. In June alone, the actual use of FDI increased 15.1 percent year-on-year, marking the second consecutive month of growth.

"Foreign investment in China remains on a stable footing, with recent data pointing to a trend of stabilization and recovery," Meng Huating, head of the ministry's Department of Foreign Investment Administration, said on Thursday at a news conference in Beijing.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, attributed the positive signs to the resilience and long-term growth prospects of the Chinese economy, coupled with the country's sustained market-opening efforts and investment facilitation measures.

"In a world facing rising protectionism and geopolitical tensions, multinational companies are looking to deepen their investment in China as a hedge against external shocks," Zhou added.

The World Investment Report 2026, which was released this month by the United Nations Trade and Development, noted that despite a challenging global investment environment, FDI inflows in China are "showing signs of stabilization" after three years of adjustment.

The UN trade body said that China's inward FDI is moving away from scale-driven expansion toward structural upgrading and quality improvement, with capital increasingly flowing into advanced manufacturing, scientific and technological innovation, and modern services.

Such a shift is visible in the data released by the ministry. FDI in China's high-tech industries surged 33.2 percent year-on-year in the first half, lifting its share in total inflows to a record 42.4 percent.

"The figures show that China's FDI mix is moving steadily up the value chain, while foreign investors remain bullish on the Chinese market," Vice-Minister of Commerce Yan Dong said at the news conference. "Nearly 4,800 foreign-funded enterprises expanded their investment in China in the first half."

United States-based athleisure company Skechers is among the multinational enterprises expanding their footprints in China. The company has invested more than 4.2 billion yuan to build a logistics center in Taicang, Jiangsu province, while expanding its R&D and livestreaming base in Dongguan, Guangdong province.

The company is also accelerating its digital transformation, said Willie Tan, CEO of Skechers China, South Korea and Southeast Asia.

Skechers is not alone in tapping China's innovation ecosystem. Joe Bao, president of Kone China, said that China has become not only a major market for the Finnish elevator manufacturer, but also a critical part of its global manufacturing and innovation network.

Sino-US trade talks

At the news conference, Meng, from the Commerce Ministry, provided updates on the latest economic and trade consultations between China and the US.

She said the two countries are maintaining close communication on specific arrangements for the proposed trade council — a body the two sides agreed to establish based on the consensus reached by the two heads of state — and a reciprocal tariff reduction framework covering $30 billion worth of products on each side.

"China is seeking views from a wide range of domestic enterprises and business associations, local governments, and US companies and chambers of commerce in China. The US side, meanwhile, is seeking public opinion on the trade council and the tariff framework," she said.