by XIN Yuan

China on Wednesday expanded incentives for foreign investment in manufacturing and services, as Beijing released a revised policy catalogue that will take effect on Feb. 1, 2026.

The 2025 edition of the Catalogue of Industries Encouraged for Foreign Investment, jointly issued by the National Development and Reform Commission and the Ministry of Commerce with State Council approval, sets out priority sectors and regions for overseas capital.

The 2025 version contains 1,679 items, a net increase of 205 from the 2022 edition, with 303 items revised, official data showed. The nationwide encouraged list now includes 619 items, while the regional list covering central and western China, the northeast and other designated areas totals 1,060 items.

Authorities said the revisions center on three priorities. Incentives were expanded for advanced manufacturing, with new or broadened entries spanning end products, components and raw materials, as Beijing seeks to strengthen industrial and supply chains. Support was also stepped up for modern services, including business and technology services, scientific research and consumer services. In addition, the catalogue widens incentives for investment in central and western China, the northeast and Hainan, factoring in local resource endowments and industrial strengths.

CHEN Hongna, an associate researcher at the Development Research Center of the State Council, said in comments to state media Xinhua that the updated encouraged catalogue works alongside China's steadily shortened negative list, together improving policy predictability. The approach, she said, has helped attract higher-quality foreign investment into services while encouraging Chinese firms to raise competitiveness.

In April, the commerce ministry launched a new round of comprehensive pilot programs, setting out 155 tasks across 14 areas, including telecoms and digital services, healthcare, finance, trade and tourism.

Official data showed that China's foreign direct investment (FDI) inflows fell 7.5% year on year to 693.18 billion yuan in the first 11 months of 2025, although inflows in November alone rose 26.1%. The number of newly established foreign-invested enterprises increased 16.9% to 61,207 over the same period.

An NDRC spokesperson said authorities will next focus on advancing major foreign-invested projects, improving services for foreign firms and building platforms to link overseas investors with Chinese partners, including through investment-matching events and stronger project coordination.