Key Points
- China announced a 12-point plan on July 18, 2025, involving seven powerful government bodies (e.g., NDRC, People’s Bank of China), to significantly boost domestic reinvestment from foreign-invested enterprises (FIEs).
- The initiative aims to create a more attractive environment for foreign companies to reinvest profits back into the Chinese market, furthering China’s commitment to “high-level opening-up” and expanding high-standard foreign investment.
- Key policy measures focus on streamlining processes (e.g., faster approvals, simplified registration), reducing costs (cheaper land use, tax breaks), and facilitating financial flows (easier FX movements, innovative financial products) for FIEs.
- The plan encourages foreign capital into strategic high-growth areas like advanced manufacturing, modern services, and high-tech industries, and pushes investment towards China’s central, western, and northeastern regions.
- Experts, such as Yuan Shenglong (苑生龙) from the China Academy of Macroeconomic Research, view these measures as crucial for promoting the “expansion, stability, and quality improvement of foreign capital” amidst stagnant global cross-border investment.
China’s latest foreign investment policies are making waves, and for investors, founders, and tech operators, this is a signal you can’t ignore.
On July 18, 2025, China dropped a major announcement, rolling out a 12-point plan to boost domestic reinvestment from foreign-invested enterprises (FIEs).
This isn’t just a minor tweak.
It’s a coordinated push from seven of the country’s most powerful government bodies, including the National Development and Reform Commission (NDRC) and the People’s Bank of China (Renmin Yinhang 中国人民银行).
Let’s break down what this means and why it matters.
Why This Move is a Big Deal for Foreign Capital
Simply put, China wants foreign companies already operating in the country to double down.
Instead of pulling profits out, the government is creating a more attractive environment for them to reinvest that capital back into the Chinese market.
An official from the NDRC told China Central Television (CCTV Zongtai Jizhe 总台记者) that this is all part of China’s commitment to “high-level opening-up.”
It’s a clear signal to multinational corporations that they’re welcome for the long haul.
This initiative isn’t happening in a vacuum. It follows calls from the “Government Work Report” and a Politburo meeting to expand high-standard opening-up and encourage foreign investor reinvestment.
What’s Next on the NDRC’s Roadmap?
- Manufacturing: Advanced manufacturing
- Services: Modern services
- Technology: High-tech industries
- Environment: Energy conservation and environmental protection
Jing Qin (Jing Qin 荆琴), Deputy Director of the Foreign Investment Department at the NDRC, laid out a clear action plan:
- Track implementation to ensure the policies actually work.
- Launch special actions to serve FIEs and boost their “sense of gain and satisfaction.”
- Establish “green channels” for major foreign investment projects to fast-track their implementation.
- Revise the “Catalogue of Industries Encouraging Foreign Investment” to guide capital towards key sectors.
The focus is on funneling foreign capital into high-growth areas like:
- Advanced manufacturing
- Modern services
- High-tech industries
- Energy conservation and environmental protection
They’re also pushing investment into China’s central, western, and northeastern regions to spread the economic benefits.
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Expert Take: A Shot in the Arm for Stability and Quality
In a world of stagnant cross-border investment, experts see this as a smart move by China.
Yuan Shenglong (Yuan Shenglong 苑生龙), a director at the China Academy of Macroeconomic Research, pointed out that these measures will help “promote the expansion, stability, and quality improvement of foreign capital.”
He highlighted that creating a project database and offering service guarantees will guide FIEs to participate in key industries.
This helps accelerate the shift from labor-intensive sectors to capital and technology-intensive ones.
Yuan also noted that the new rules make it much easier for FIEs to navigate the financial side of reinvestment.
By clarifying rules around foreign exchange transfers and encouraging financial institutions to create supportive products, China is removing major friction points for foreign investors.
The 12-Point Playbook: A Breakdown for Investors
Here’s a look at the 12 specific measures designed to make reinvesting in China easier and more profitable.
The full, official text is below, but here’s the tl;dr version:
- Who It’s For: Any legally established FIE using undistributed profits to start new ventures, increase capital, or acquire stakes in other domestic companies.
- Better Project Support: Local governments will create a database of reinvestment projects, and eligible projects can get listed as “major and key foreign investment projects” to receive extra support.
- Cheaper Land Use: FIEs get more flexible options like long-term leases or “lease before transfer” (xian zu hou rang 先租后让) models to slash upfront land costs.
- Faster Approvals: If an FIE is creating a new wholly-owned subsidiary, the approval process for industry permits already held by the parent company will be simplified and sped up.
- Tax Breaks: Full implementation of existing tax support policies to encourage reinvestment. (A clear signal to make sure companies are actually getting the benefits they’re entitled to).
- Import Equipment Perks: Reinvestment projects that fall under the “Catalogue of Industries Encouraging Foreign Investment” will get support policies for importing necessary equipment.
- Easier FX Movements: FIEs can transfer their legitimately earned foreign exchange profits domestically for reinvestment, cutting through red tape.
- Simplified Registration: For genuine and compliant projects, if an FIE uses foreign exchange capital for domestic reinvestment, the receiving company doesn’t need to handle separate “domestic reinvestment” registration. (Less paperwork = faster deals).
- Streamlined Financing: A “green channel” for eligible foreign shareholder loans and “Panda Bonds,” making it easier to raise capital for reinvestment.
- Innovative Financial Products: A nudge to banks and financial institutions to create new products and services specifically for FIEs looking to reinvest.
- Smarter Info Sharing: Pilot programs for investment reporting and better data sharing between government departments will make it easier for companies to access support policies.
- Fairer Evaluation: Shifting the focus of foreign investment promotion to the actual economic and social contributions of reinvestment projects.
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The Official Memo: Full Text of the Notice
For those who want to dive into the details, here is the full text issued by the seven government departments.
Issued by the National Development and Reform Commission, Ministry of Finance, Ministry of Natural Resources, Ministry of Commerce, People’s Bank of China, State Taxation Administration, and State Administration of Foreign Exchange.
Reference Number: Fa Gai Wai Zi [2025] No. 928
To the People’s Governments of Provinces, Autonomous Regions, Municipalities Directly Under the Central Government, Cities with Separate Planning Status, and Xinjiang Production and Construction Corps:
To implement the decisions and deployments of the Central Committee of the Communist Party of China and the State Council, to attract and utilize foreign capital with greater intensity, and to encourage foreign-invested enterprises to reinvest domestically, with the approval of the State Council, the following policy measures are hereby notified:
I. Applicability: The measures listed in this “Notice” apply to foreign-invested enterprises legally established within China that use undistributed profits, or overseas investors who use legitimate domestic profits (both RMB and foreign currency) to establish new enterprises, increase capital in existing enterprises, or acquire shares, equity, property interests, or other similar interests in Chinese domestic enterprises, as well as invest in projects within China.
II. Project Service and Guarantees: Localities shall establish a database for foreign-invested enterprise domestic reinvestment projects based on actual conditions and provide good project service and guarantees. Eligible foreign-invested enterprise domestic reinvestment projects may be included in the list of major and key foreign investment projects and enjoy corresponding support policies.
III. Optimized Land Element Allocation: Support foreign-invested enterprises in flexibly adopting methods such as long-term industrial land leases, “lease before transfer, then transfer” (xian zu hou rang 先租后让), and flexible-term transfers when reinvesting domestically, to reduce initial land costs. Specific methods shall be implemented according to existing encouraging and supporting policies.
IV. Streamlined Approval Procedures: When a foreign-invested enterprise establishes a new wholly-owned legal entity domestically, for applications to process industry access permits already obtained by its parent company, relevant industry authorities may legally optimize and simplify the processing procedures and shorten the processing time, provided the basic conditions are met.
V. Tax Support Policies: Legally implement and enforce relevant tax support policies to encourage overseas investors to reinvest in China and promote the formation of more effective investment.
VI. Import Equipment Support: For projects invested by foreign-invested enterprises in their domestically reinvested entities, if they meet the criteria of the “Catalogue of Industries Encouraging Foreign Investment,” they shall enjoy relevant support policies for imported equipment.
VII. Foreign Exchange Facilitation: When foreign-invested enterprises use legitimately generated foreign exchange profits, or overseas investors use legitimately obtained domestic foreign exchange profits, for domestic reinvestment, the relevant foreign exchange funds can be transferred domestically in accordance with regulations.
VIII. Simplified Reinvestment Registration: Subject to compliance with special administrative measures for foreign investment access and provided that the domestically invested projects are genuine and compliant, when foreign-invested enterprises conduct domestic reinvestment using foreign exchange capital or RMB funds obtained from its settlement, the invested enterprise or equity transferor does not need to handle registration procedures for receiving domestic reinvestment.
IX. Facilitated Financing: For eligible foreign shareholder loans and “Panda Bonds” required for foreign-invested enterprises’ domestic reinvestment, management procedures will be optimized and included in a “green channel” management.
X. Innovative Financial Services: Encourage various financial institutions, in compliance with laws and regulations and under controlled risks, to innovate products and services to provide financial services and support for foreign-invested enterprises’ domestic reinvestment.
XI. Information Sharing and Reporting: Promote pilot programs for information reporting on foreign-invested enterprises’ domestic investments, strengthen inter-departmental information sharing for foreign-invested enterprises’ domestic reinvestment, and provide convenience for enterprises to enjoy relevant support policies.
XII. Optimized Evaluation Methods: Further optimize the evaluation methods for promoting foreign investment, focusing on the actual contribution of foreign-invested enterprises’ domestic reinvestment to economic and social development.
National Development and Reform Commission, Ministry of Finance,
Ministry of Natural Resources, Ministry of Commerce,
People’s Bank of China, State Taxation Administration, State Administration of Foreign Exchange
July 7, 2025
The Bottom Line
This is a clear, strategic move by Beijing to make China’s domestic market more “sticky” for foreign capital.
By reducing bureaucracy, lowering costs, and streamlining financial flows, China is actively responding to the needs of multinational corporations.
For investors and companies with a presence in China, these new foreign investment policies present a significant opportunity to deepen their footprint and capitalize on growth in the world’s second-largest economy.
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