China widens foreign investment incentive list to stem falling inflows

By Kevin Yao

BEIJING, Dec 24 (Reuters) - China on Wednesday listed more sectors eligible for foreign investment incentives, from tax breaks to preferential land use, in its latest effort to stem a prolonged decline in overseas capital inflows.

Under the 2025 edition of the catalogue of industries for encouraging foreign investment, China added more than 200 and revised about 300, with a focus on advanced manufacturing, modern services and green and high‑tech sectors, the list jointly issued by the National Development and Reform Commission and the commerce ministry showed.

The new catalogue, which takes effect on February 1, 2026, replaces the 2022 version and continues a policy framework that offers foreign-invested enterprises tariff exemptions on imported equipment, preferential land pricing, reduced corporate income tax rates in designated regions and tax credits for reinvestment of profits.

The catalogue also extends incentives to central and western regions, as well as the northeast and Hainan, as Beijing seeks to attract more foreign investment into less developed areas.

China has in recent months taken a raft of measures to boost foreign investment, including pilot programs in Beijing, Shanghai and other regions to expand market access in services such as telecoms, healthcare and education, amid trade tensions with the United States.

Foreign direct investment in China totalled 693.2 billion yuan ($98.84 billion) from January to November this year, down 7.5% from the same period last year, data from the commerce ministry showed.

($1 = 7.0136 Chinese yuan renminbi)