China foreign investment 2026: less money, and the entrant boom has stalled

China used RMB 479.95 billion of foreign investment (实际使用外资) from January to August 2026, down 5.3% on a year earlier, while 42,582 foreign-invested enterprises were newly established, up 0.3%. In 2025 the money fell 9.5% and new enterprises rose 19.1%. The fall in money is slowing; the rise in new entrants has almost stopped.

Every month the Ministry of Commerce (MOFCOM) publishes two numbers that are easy to read as one. The first is money: foreign investment actually used. The second is decisions: how many foreign-invested enterprises were newly established. In 2025 they pointed in opposite directions, which made “FDI down, entrants up” the story of the year. The releases for 2026 have changed it, and the second number is the one that moved.

What do the latest MOFCOM figures show?

From January to August 2026, RMB 479.95 billion of foreign investment was used, down 5.3% on the same period of 2025, and 42,582 foreign-invested enterprises were newly established, up 0.3%.^⁠[1] The table puts that beside the two full years before it and the months in between.

Period	Foreign investment used	New foreign-invested enterprises
2024	RMB 826.25bn, down 27.1%	59,080, up 9.9%
2025	RMB 747.69bn, down 9.5%	70,392, up 19.1%
January to June 2026	RMB 402.14bn, down 5%	31,617, up 5.3%
January to July 2026	RMB 438.33bn, down 6.2%	37,711, up 4.4%
January to August 2026	RMB 479.95bn, down 5.3%	42,582, up 0.3%

The money has now fallen in both 2024 and 2025, by 27.1% and 9.5%.^⁠[2,3] The fall has since narrowed, and June 2026 on its own was up 15.1% on June 2025.^⁠[4] The count of new enterprises has gone the other way: from 19.1% growth in 2025 to 0.3% by August. Cumulative growth dropping from 4.4% to 0.3% in one month means fewer foreign-invested enterprises were established in August 2026 than in August 2025.^⁠[1,5]

Why can the money fall while new companies are formed?

Because the two series measure different things. Foreign investment actually used is the registered capital and working capital foreign investors actually pay in, plus the price they actually pay for equity bought from Chinese investors. It counts money paid in, and MOFCOM’s monthly return has a column for capital reductions under contracted capital only, so nothing is netted off the actual-use figure.^⁠[6] It therefore includes capital paid into companies that already exist: nearly 4,800 foreign-invested enterprises added investment in the first half of 2026.^⁠[7] A handful of large projects and capital increases can move it by billions.

The count of newly established enterprises weighs every new company the same, however small. So a year like 2025, with less money and more companies, describes smaller commitments rather than a retreat. Dividing one series by the other gives foreign investment used per newly established enterprise: about RMB 13.99 million in 2024 and RMB 10.62 million in 2025, a fall of roughly a quarter.^⁠[2,3] Because the money includes existing companies, that is a ratio, not the size of a typical new entrant.

Has the rise in new foreign companies stopped?

Nearly, on the figures to August. The 19.1% rise in 2025 slowed to 5.3% in the first half of 2026 and 0.3% by the end of August.^⁠[1,2,4] One month does not make a trend, and the next release will show whether August was an outlier. What the data no longer supports is the reading, common in early 2026, that small foreign entrants were arriving in growing numbers regardless of what large investors did.

Where is the money going?

Into services, and increasingly into high technology. In 2025, services took RMB 545.12 billion and manufacturing RMB 185.51 billion, and high-technology industries, which cut across both, took RMB 241.77 billion. Within high technology, e-commerce services grew 75%, medical instruments and equipment manufacturing 42.1% and aerospace equipment manufacturing 22.9%.^⁠[2]

	2025	January to August 2026
Services	RMB 545.12bn (about 73%)	RMB 350.42bn
Manufacturing	RMB 185.51bn (about 25%)	RMB 119.55bn
High-technology industries	RMB 241.77bn (about a third)	RMB 200.26bn (41.7%), up 35.1%
Fastest growth within high technology	E-commerce services +75%; medical instruments +42.1%; aerospace equipment +22.9%	R&D and design services +74%; services commercialising scientific and technological results +64.2%; electronic and communication equipment manufacturing +41.9%

The share going to high technology rose from about a third in 2025 to 41.7% in the first eight months of 2026, while the total fell.^⁠[1] Foreign money that does come is going to research, design and equipment, and less of it to everything else.

Which countries are investing more?

MOFCOM names only the fastest growers, and they change from release to release. In 2025 it named Switzerland (+66.8%), the United Arab Emirates (+27.3%) and the United Kingdom (+15.9%).^⁠[2] For January to August 2026 it named France (+39.2%), Switzerland (+16.7%) and South Korea (+16.5%).^⁠[1] The first-half release also named Saudi Arabia, up 359.4%.^⁠[4]

Each of those country figures is stated as including investment routed through free ports, so it looks through to the investor’s own country.^⁠[1] That is the exception. The series as a whole assigns investment to the investor’s place of registration, which is why Hong Kong has long accounted for most of it and why the British Virgin Islands and the Cayman Islands appear as source economies in their own right.^⁠[6,8] European and Gulf investors are not moving with the United States; the headline totals, counted by registration, cannot show that on their own.

How reliable are these figures?

Reliable for direction and composition, less so for precision. MOFCOM collects equity investment monthly and shareholder loans and retained earnings annually, and each year, before 30 September, may make a single adjustment to earlier years’ figures.^⁠[6] The source-economy split hides the ultimate owner behind Hong Kong and the offshore centres.

The foreign exchange regulator measures the same flows differently. SAFE’s balance of payments put direct investment liabilities at USD 80.0 billion for 2025^⁠[9] and, on preliminary figures, USD 56.7 billion for the first half of 2026.^⁠[10] It is a different measure, built for the balance of payments rather than for counting companies, and the two should not be compared line by line.

What is the government doing to attract foreign investment?

Two action plans and a tax credit in eighteen months. The State Council’s 2025 plan to stabilise foreign investment set out 20 measures, including equal access to government procurement for products made in China by foreign-invested companies, and more reinvestment of the profits they earn in China.^⁠[11] A second plan, issued by MOFCOM, the NDRC and the Ministry of Finance with State Council approval on 16 June 2026, covers market access, investment facilitation, promotion and services.^⁠[12]

The tax credit is the concrete one. A foreign investor that reinvests profits distributed by a Chinese resident enterprise between 1 January 2025 and 31 December 2028 may credit 10% of the amount against its tax for that year, carrying forward what it cannot use. The conditions are cumulative: the money must go into one of three named forms of direct investment, the company invested in must be in an industry on the encouraged catalogue for foreign investment, the stake must be held for at least five years, and the funds must be paid across directly.^⁠[13] Access has widened too: the 2024 foreign investment negative list has 29 items and none of them is in manufacturing.^⁠[14] What that list still restricts is set out in the negative list explained.

What does this mean for a small foreign business?

Our reading, not MOFCOM’s: the market is being entered with smaller, more reversible commitments, and it is not getting more crowded. Three consequences follow.

• The benchmarks written for multinationals do not describe you. A company formed to invoice, hire a few people or hold stock is the ordinary case. What it costs to set up and keep one running is in what it costs to set up and run a company in China.
• Services and technology are where foreign money is going. That is where the regulators, the landlords and the service providers are used to foreign clients.
• Testing before committing is a strategy. A distributor, cross-border e-commerce or a small entity each lets you learn whether there is a market before you fund one. Many businesses need no Chinese company at all to begin.

When is the next figure published?

MOFCOM publishes the monthly national figures within 30 days of the month end.^⁠[15] It released the July figures on 21 August and the August figures on 18 September,^⁠[1,5] so January to September 2026 should appear by late October, and the full year in the second half of January 2027. This page will be updated when it does.

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