What New Opportunities Await Foreign Investors? The 2025 Edition of the Encouraged Industries Catalogue Unveils Three Major Highlights!
205 New Opportunities, 303 Adjustments—How Can Foreign Enterprises Seize the New Prospects?
After three years, China's foreign investment policy has once again undergone significant adjustments. In December 2025, the National Development and Reform Commission and the Ministry of Commerce released the Catalogue of Encouraged Industries for Foreign Investment (2025 Edition), which will take effect on February 1, 2026. This new edition contains a total of 1,679 entries—a net increase of 205 entries and 303 modifications compared to the 2022 version—sending a clear signal to the global market that China is committed to expanding high-standard opening-up.
So, what exactly are the highlights of this new edition? And what new opportunities can foreign enterprises seize? Here is our in-depth analysis.
I. Policy Background: Stabilizing Expectations and Demonstrating Commitment to Opening Up
Against the backdrop of increasing uncertainty in global economic recovery and profound adjustments in the international industrial landscape, the introduction of the new Encouraged Catalogue carries significant weight. This is not only an important policy tool for stabilizing foreign investment in China, but also a crucial measure for optimizing the industrial structure and regional distribution of foreign investment.
This revision extensively solicited opinions from foreign-invested enterprises, industry associations, and local governments. By "making additions" to substantially increase the number of encouraged entries, China is proving with concrete actions that the door to the outside world will not close—it will only open wider.
II. Three Core Changes: Where Are the Opportunities?
Change 1: "Strengthening and Supplementing Industrial Chains" in Advanced Manufacturing Becomes the Top Priority
The national catalogue has added 100 new entries and modified 131, focusing on enhancing the resilience of industrial and supply chains.
Key new areas include:
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Biomedicine: Development and production of nucleic acid-based drugs
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High-end Equipment: Zero-magnetic medical equipment, intelligent inspection equipment, high-speed cameras
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Smart Manufacturing: Smart energy management systems, key basic components for robotics
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Marine Engineering: Ships, deep-sea underwater operation robots
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Energy Equipment: Manufacturing of key gas turbine equipment
Analysis: Transitioning from a "manufacturing giant" to a "manufacturing powerhouse," China needs foreign investment to "fill the gaps" in key technology areas. These newly added sectors are all technology-intensive industries, meaning foreign enterprises can play a more important role in China's industrial upgrading.
Change 2: Modern Service Industries Enter a "Golden Period" of Quality Improvement and Expansion
For the first time, the national catalogue has elevated modern service industries to a priority encouraged direction on par with advanced manufacturing.
Key coverage areas include:
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Business Services: Supply chain management, professional consulting
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Technical Services: R&D design, technology transfer
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Scientific Research: Applied basic research, new R&D institutions
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Consumer Services: Cultural tourism, health and elderly care
Analysis: This sends two major signals. First, China's manufacturing upgrading requires high-quality producer services as support. Second, the super-large market of 1.4 billion people holds tremendous potential for service consumption. From "building factories" to "opening stores," and from B2B to B2C, foreign enterprises have new space for growth.
Change 3: More Precise Regional Distribution with "Central, Western, Northeast + Hainan" Becoming Hotspots
The regional catalogue has added 105 new entries and modified 172, guiding foreign investment according to local conditions.
Coverage areas: Central and western regions, northeastern regions, and Hainan Province.
Examples of local characteristics:
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Central and Western Regions: Leveraging resource endowments and labor advantages
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Northeast: Focusing on equipment manufacturing and modern agriculture
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Hainan: Superposition effects of free trade port policies
Analysis: Encouragement policies are no longer "one-size-fits-all" but "precisely targeted." Each region can attract suitable foreign investment projects based on its own comparative advantages, avoiding homogeneous competition.
III. What "Benefit Packages" Can Foreign Enterprises Enjoy?
Foreign investment projects included in the Encouraged Catalogue can enjoy "four levels of preferential treatment":
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Tariff Exemptions: Import duties exempted on self-use equipment
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Land Preferential Policies: Priority supply of construction land, available through negotiated transfer
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Income Tax Incentives: Corporate income tax levied at a reduced rate of 15% (in specific regions)
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Approval Facilitation: Simplified approval procedures and optimized processes
In summary: Lower costs + priority land supply + improved efficiency = Stronger competitiveness.
IV. Practical Recommendations: How to Make Good Use of the New Policies
Recommendation 1: Conduct Immediate Self-Assessment and Benchmarking Manufacturing enterprises should focus on studying the new entries in the national catalogue to see if their products or technologies "match the criteria."
Recommendation 2: Pay Attention to Regional Opportunities Enterprises with existing investment plans should focus on examining the central and western regions, northeastern regions, and Hainan to assess the advantages of policy superposition.
Recommendation 3: Seize the Time Window The policy will not take effect until February 1, 2026, leaving ample preparation time. It is recommended to engage with local governments and commerce departments as early as possible.
Recommendation 4: Seek Professional Support Policy implementation requires professional interpretation. Consult professional investment advisory institutions for customized solutions.
V. Conclusion: Opportunities and Challenges Coexist—The Doers Prevail
The 2025 Edition of the Encouraged Catalogue represents not just an increase in numbers, but an evolution in China's philosophy on utilizing foreign investment—from "welcoming all comers" to "precise guidance," and from "policy preferences" to "institutional opening-up."
For foreign enterprises, only by understanding the national strategy behind the policies and identifying their own positioning can they achieve mutual benefit and win-win results in this tide of China's high-quality development.