Keeping Pace with the Chinese Mar- ket, Foreign Investment in China In- tensifies
导读
In the spring of 2025, the annual China Development Forum (CDF) once again sent out new signals.
During the meeting, representatives from many multinational corporations expressed their willingness to increase investment in China, hoping to keep pace with the Chinese market and work with Chinese enterprises to create a broader future.
This year, as major moves by foreign companies in China continue to emerge, such as Tesla’s inauguration of its energy storage gigafactory in Shanghai and AstraZeneca’s additional investment in its Wuxi base, it is intriguing to explore the new opportunities for "investing in China" as seen by foreign executives. Fortunately, the 2025 CDF provided some clear answers.
According to the organizers of CDF, more than 750 foreign representatives attended this year’s forum, including 118 official delegates, with 86 from the business community. The multinational companies participating in the forum come from a wide range of countries, and the number of first-time participants reached a new high. This year, 17 companies, including IKEA and Brookfield, sent official representatives to the forum for the first time, the largest number in history, accounting for 20% of the total number of companies.
China’s economic recovery and improvement.
Han Wenxiu, Deputy Director in charge of the daily work of the Central Finance and Economics Commission Office, said at the meeting that in the face of increasing external uncertainties and instabilities, China will unwaveringly focus on its own affairs, using the certainty of high-quality development to counter the uncertainties of the external environment and striving to provide a “stabilizing anchor” for global economic development.
Han pointed out that this year, China’s economy continues to show a positive trend of recovery and improvement, and is expected to achieve a good start. Macroeconomic policies still have considerable room for counter-cyclical adjustment. China is confident that its high-quality development will add stability and certainty to global prosperity.
Not long ago, the National People’s Congress and the Chinese People’s Political Consultative Conference were convened, clarifying the main expected goals for this year’s economic and social development. “These goals are prudent and pragmatic, taking into account the needs for stable employment, people’s well-being, and risk prevention, as well as China’s economic growth potential, the impetus for deepening reforms and expanding opening up, and the effectiveness of incremental and existing policies,” Han said.
“For many years, as a responsible major country, China has firmly acted as a defender of the multilateral trading system, demonstrating the responsibility of a major country in promoting economic globalization. China has made significant progress in re-balancing its economy, with the current account surplus as a percentage of GDP declining from a peak of about 10% in 2007 to around 2% currently,” Han said. He added that no matter how the international situation changes, China will unswervingly advance high-level opening up, steadily expand institutional opening up, orderly expand autonomous and unilateral opening up, deepen the reform of the foreign investment promotion system, create a first-class business environment that is market-oriented, rule-of-law-based, and internationalized, steadily promote the opening up of the service sector including the financial industry, and actively develop green trade and digital trade.
“We are confident in riding the wave to implement more proactive macroeconomic policies, further comprehensively deepen reforms, expand high-level opening up, achieve the successful conclusion of the 14th Five-Year Plan with new results of high-quality development, and lay a solid foundation for the development of the 15th Five-Year Plan,” Han said.
Expanding domestic demand in an all-round way
China is committed to expanding domestic demand as a long-term strategy, striving to make consumption the main driving force and stabilizer of economic growth. “China’s consumption scale is already large, but the proportion of consumption in the national economy and total demand is still relatively low, with a gap of about 20 percentage points compared to developed countries. The potential for expanding consumption is huge,” Han said. “China will adopt a comprehensive approach to expand consumption, continuously forming a mutually reinforcing and complementary situation between high-quality development and high-quality life.”
Lan Fo’an, Minister of Finance, discussed the focus of this year’s fiscal policy at the meeting: the primary task is to vigorously boost consumption, improve investment efficiency, and expand domestic demand in an all-round way. “China has the world’s most potential super-large-scale market, with a very broad space for consumption growth,” Lan said. To transform potential demand into actual demand, the central government has allocated substantial funds to boost consumption from both the supply and demand sides.
According to the budget plan, China will issue ultra-long-term special treasury bonds worth 1300 billion yuan this year, an increase of 300 billion yuan compared to last year. Of this amount, 800 billion yuan will be used to more strongly support “two key” projects, and RMB 500 billion will be allocated to expand the implementation of the “two new” policies.
Lan introduced that this year, RMB 300 billion of ultra-long-term special treasury bonds will be arranged to support the renewal of consumer goods, an increase of RMB 150 billion compared to last year. “The fund size has doubled compared to last year, which will help directly reduce consumers’ shopping costs and focus on combining the improvement of people’s livelihood with the promotion of consumption. By increasing the level of pensions and distributing medical subsidies, we will continuously enhance residents’ consumption capacity and willingness,” Lan said.
Lan also mentioned that in terms of supporting effective investment expansion, the fiscal fund volume this year is also relatively large. Funds from different channels are coordinated and arranged with different focuses, and a new mechanism for managing special bonds has been established to give local governments more autonomy. At the same time, efforts are being made to mobilize the enthusiasm of private investment and leverage a broader range of social investment for continuous growth.
Private economy under universal focus
Among many hot topics in economics, the private economy, which has “indicative significance,” has attracted widespread attention from home and abroad. Several government participants have made important statements on promoting the private economy. At the first thematic discussion of the annual meeting on “Macroeconomic Policy and Economic Growth,” Han Wensheng clearly stated that it is necessary to pay high attention to solving the problem of overdue payments to enterprises. Fiscal and monetary policy tools will be coordinated to achieve significant progress as soon as possible.
Lan Fo’an also said that enterprises are the main body of innovation and entrepreneurship. The Ministry of Finance will improve various pro-enterprise policies and implement measures to promote the development of the private economy, helping enterprises solve practical difficulties and achieve innovative development.
“The private economy is the core and key to innovation. You will usually find that the innovations that change society come from the private sector,” said Ken Griffin, founder and CEO of Citadel Investment, in a dialogue with Professor Huang Yiping from the National School of Development at Peking University. He mentioned that over the past few decades, there have been many innovation stories in both China and the United States, such as Bill Gates’ Microsoft, Steve Jobs’ Apple, and the recent DeepSeek, all of which involve a small number of people making some innovations and breakthroughs.
At this year’s China Development Forum, although DeepSeek was not present at the venue, its “legend” could be found everywhere. Almost every representative from foreign companies and overseas institutions interviewed by the media mentioned DeepSeek as one of the most frequently asked topics. “China’s innovation is constantly bringing surprises to the world, such as the high-performance and highly open AI model recently developed by DeepSeek,” said Roland Busch, Chairman of the Executive Board and President and CEO of Siemens AG and the foreign chairman of this forum, at the opening ceremony.
At the same time, many overseas people have also noticed the key role of the private sector and the private economy in such disruptive innovation. Dilma Rousseff, President of the New Development Bank and former President of Brazil, said at the above-mentioned seminar that a strong investment environment for the private sector is very important. The government must invest in education, infrastructure, and innovation while ensuring a fair regulatory environment for both public and private enterprises. A truly competitive market can improve efficiency and create momentum for innovation and growth.
Nigel Clark, Deputy Managing Director of the International Monetary Fund, believes that to achieve continuous success, reforms must be continuously advanced. For example, strengthening the private sector is crucial, as entrepreneurs drive innovation and creation by investing in industries with the highest returns. To create an environment for their prosperity, relevant departments must establish a fair competitive environment between the private sector and state-owned enterprises.
According to Masatsugu Asakawa, President of the Asian Development Bank, the two key areas that need the most attention for promoting China’s economic growth are real estate and the private sector. A stable and predictable policy environment will support the private sector in innovation, improving productivity, and creating job opportunities. He suggested that to achieve a high-quality development transformation, China must carefully rebalance its economy by stimulating domestic demand and household consumption through income increases, stabilizing the real estate market through demand-side and supply-side reforms, and strengthening the private sector by providing a fair competitive environment.
Foreign investment focuses on deepening engagement in China and policy opportunities
The 2025 Government Work Report emphasizes “expanding high-level opening up and actively stabilizing foreign trade and investment,” stating that “no matter how the external environment changes, China will always adhere to opening up, steadily expand institutional opening up, orderly expand autonomous and unilateral opening up, and promote reform and development through opening up.” Several foreign company executives shared their experiences of continuous cooperation and mutual benefit with China under the nation’s reform and opening-up policies.
Chairman of BMW Group, Oliver Zipse, stated that BMW has been in China for over 30 years, deeply engaging in the Chinese market and preparing for growth, viewing China as a crucial support for its future development. “The Shenyang production base has become a world-class manufacturing and innovation hub. The ‘AI+’ initiative in the 2025 Government Work Report is key for future cooperation. China’s policy support is vital for the high-quality development of the new energy vehicle industry.”
Chairman of Mercedes-Benz Group AG, Ola Källenius, mentioned, “Mercedes-Benz is committed to China’s market. Many technologies and products developed here serve not only the local market but are also widely used globally. Unified regulation, market opening, and fair competition create fertile ground for innovation.” Accelerating collaborative innovation and focusing on digital transformation. Foreign companies closely follow the development of China’s new productive forces and accelerate the digital transformation of their operations in China, leveraging digital technology for smart manufacturing and building localized business models.
Mike Henry, CEO of BHP, said, “Over the next decade, BHP will significantly increase investment in technologies like AI and seeks more partnerships with governments, industries, and companies to achieve development.” He noted that copper is crucial for electric vehicles, and BHP’s collaborations with Chinese companies are key to meeting global demand. Zipse added, “We are deepening strategic cooperation with China’s tech leaders, integrating cloud interaction and generative AI for personalized experiences. Our vehicles will seamlessly connect with China’s smart city infrastructure.”
Zhao Guohua, Chairman of Schneider Electric Group, highlighted that in China, digital and electrical technologies have driven new productive forces. In electrification, 70% of carbon emissions can be eliminated via technology, with energy efficiency projects yielding a 5-year ROI, showing investment potential. In digitalization, AI boosts efficiency across industries. Roland Busch, CEO of Siemens AG, introduced Siemens’ “Xcelerator” platform in China, aimed at helping SMEs with digital transformation. “We will keep investing to support China’s development. Together, Siemens can aid China’s economic transition and accelerate new productive forces,” he stated.
Jean Laurent Boudreau, Chairman of BNP Paribas, mentioned collaboration with Nanjing Bank and willingness to expand partnerships with China’s banking sector. In Europe, BNP Paribas aims to meet Chinese companies’ overseas financing needs. Christian M. Schulz, CEO of Swiss Re, pointed out that AI and green energy require long-term stable investment. As an institutional investor, Swiss Re looks to play a significant role in China’s strategic market, supporting sustainable and innovative growth.