On 16 June 2026, the Ministry of Commerce and two other ministries jointly issued the Action Plan for Stabilising and Optimising the Utilisation of Foreign Investment (2026 Plan), succeeding the 2025 Action Plan for Stabilising Foreign Investment (2025 Plan). The addition of the Ministry of Finance as co-issuer and the title shift from “stabilising” to “stabilising and optimising” signal a pivot toward quality-driven FDI attraction backed by fiscal incentives.

New features in the 2026 Plan

• Financial sector opening: foreign institutions gain access to treasury bond futures, fund advisory services, facilitated cross-border financing, and domestic listing pathways.
• Cross-border data flow management: FTZs and pilot cities may develop scenario-based, industry-specific data export negative lists; national standards for important data identification across key industries (auto, pharma, telecom, aerospace, etc.).
• Upgrade to the Closer Economic Partnership Arrangement with Hong Kong and Macau: greater opening to Hong Kong and Macau investors in services, with the digital economy and health care as priority areas.
• Foreign R&D centres: new support policies, including measures to facilitate the recruitment of foreign talent, open innovation platforms, and tax preferences for imported research equipment and materials.
• Digital service platform: an “Investing in China” portal integrating information, consultation, and interactive feedback for foreign investors.
• Consumption and online protection: foreign enterprises explicitly included in consumption-boosting policies; new mechanisms for online IP and other rights protection.
• Regional coordination and local regulation: pairing cooperation between the eastern region and border regions to promote investment; new encouraged and prohibited lists governing local government investment promotion.

Notable changes from the 2025 Plan

• National treatment strengthened: all enterprise support policies must apply equally to foreign enterprises (unless the law provides otherwise); strict fair competition review of government procurement and bidding.
• M&A framework enhanced: streamlined consideration payment requirements; foreign PE/VC funds may now participate as strategic investors in listed company securities issuances.
• Service sector opening expanded: pilot programmes now cover vocational schools and leading universities; pharmaceutical sector adds rules on cross-border segmented production and expands hospital pilot programmes.
• Reinvestment incentives specified: tax preferences for overseas investors reinvesting distributed profits; more reinvestment projects included in major and key project lists.

Practical tips for foreign-invested enterprises and related entities

With the introduction of the 2026 Plan, China’s foreign investment policy has entered a new phase focused on maintaining investment levels while improving investment quality. Foreign-invested enterprises and related institutions may wish to consider the following:

• Based on their own industries and business types, review key openness measures and cross-border data arrangements in key sectors such as services, finance, and pharmaceuticals, and assess market access opportunities and compliance requirements.
• In investment, financing, and M&A arrangements, focus on the applicability of upcoming revisions to regulations for foreign investors acquiring domestic enterprises and the tax incentives for profit reinvestment.
• Make full use of the “Invest in China” related service platforms and local investment promotion lists to proactively connect with project support policies and service guarantee mechanisms.
• Review the policy environment for operating in China, strengthen the use of national treatment, fair competition review, and government procurement rules, and safeguard equal market participation rights.
• Pay attention to requirements for foreign investment information reporting and data management, improve internal compliance and information systems, and adapt to trends in the digitalisation and standardisation of foreign investment management.

Client Alert 2026-145