by ZHU Yonling, ZHOU Fangying, ZHANG Hui

China's annual "two sessions" have long served as a barometer for foreign companies seeking to understand policy direction and adjust their strategies in the Chinese market. Multinational firms are paying close attention to both the stability of the business environment and new opportunities emerging from China's evolving consumer market.

This year's government work report reiterates commitments to deepen reforms in the foreign investment regime, ensure national treatment for foreign enterprises, implement the updated foreign investment negative list, and encourage reinvestment and localized production. Authorities also pledged to strengthen services for foreign businesses and further promote the "Invest in China" initiative.

SHEN Danyang, head of the drafting group for the government work report and director of the Research Office of the State Council, said foreign investors currently face "four new opportunities" in China.

The first stems from the country's vast consumer market, which requires higher-quality supply. In 2025, China's total retail sales of consumer goods exceeded 50 trillion yuan for the first time. The government work report has also placed expanding domestic demand at the top of its task list for the second consecutive year, including a special initiative to boost consumption.

Foreign companies in consumer sectors say they are seeing the shift clearly. L'Oréal told Jiemian News that China's beauty market is moving from product consumption toward more personalized, experience-driven and sustainable services, creating what it described as a trillion-yuan industry and a strong foundation for growth.

The shift from product consumption to service consumption is not limited to beauty. More broadly, the expansion of China's service economy is emerging as another opportunity for foreign investors.

In 2025, services accounted for 46.1% of Chinese residents' per capita consumption spending, a share that continues to rise. China plans further measures in 2026 to expand and upgrade the service sector, including easing market access and opening more areas to investment.

A third opportunity lies in China's evolving innovation ecosystem. With a complete industrial and supply chain system, China is also building new industrial ecosystems around the digital economy and green development, increasingly positioning itself as an innovation hub for multinational companies.

DSM-Firmenich, a multinational group focused on nutrition, health and beauty, is among the companies deepening their footprint in China. Over the past year, it has upgraded its fragrance creative center in Shanghai, expanded production lines at its Minhang facility and launched a new dairy culture production plant in Hohhot to support domestic dairy producers.

Multinational companies are also closely watching the report's emphasis on innovation. The report calls for pursuing innovation-driven development and strengthening the integration of technological and industrial innovation.

DuPont said the policy direction could further stimulate collaborative innovation across industrial value chains and create broader opportunities for multinational companies.

ZHANG Yi, president of DuPont Asia-Pacific, told Jiemian News that the company's continued investment in China reflects confidence in both the market's potential and long-term industrial trends.

"By strengthening local R&D and open collaboration, we are helping customers apply technologies in areas such as water treatment, healthcare and diversified industrial sectors," Zhang said, adding that DuPont will continue combining global innovation with local Chinese demand.

Several of DuPont's recent projects — including an automotive adhesives production base in Zhangjiagang and the localization of reverse-osmosis membrane products following the acquisition of Sinochem Ningbo Runwo Membrane Technology — have benefited from streamlined approval processes and supportive industrial ecosystems.

A fourth opportunity relates to China's continued opening-up. In 2026, the country plans to deepen reforms in pilot free trade zones and promote high-quality development in national-level economic development zones.

L'Oréal, which has established a research center in the Shanghai Pilot Free Trade Zone, told Jiemian News it has both witnessed and benefited from China's expanding high-level opening-up.

The company said the strategy of expanding institutional opening-up alongside the "dual circulation" framework has created a bridge for multinational companies to both enter the Chinese market and connect innovations developed in China with global markets.

L'Oréal has participated in the China International Import Expo for eight consecutive years, introducing multiple brands into China through the platform. At the same time, the company said innovations developed in China are increasingly contributing to global product development.

During the 2026 "two sessions", lawmakers and political advisers also proposed measures aimed at improving the business environment.

Augustus Tang, a member of the National Committee of the Chinese People's Political Consultative Conference and director at John Swire & Sons (H.K.) Limited, proposed establishing an international technology incubation base in the Guangdong-Hong Kong-Macao Greater Bay Area to help overcome barriers that still limit cross-border innovation collaboration.

QUAN Heng, a deputy to the National People's Congress and Party secretary of the Shanghai Academy of Social Sciences, proposed easing market access restrictions in service consumption sectors, including healthcare and cultural industries, to better match supply with rising consumer demand.

Such policy signals and proposals are strengthening the confidence of foreign companies to deepen their presence in China.

ZHANG Jiayin, chief executive of McDonald's China, told Jiemian News that the two sessions had sent positive signals, particularly the emphasis on boosting consumption and revitalizing offline spending.

"McDonald's China will continue enriching dining experiences and strengthening community connections," Zhang said, adding that the company aims to help stimulate local consumption.

McDonald's entered the mainland Chinese market in 1990 and now operates across all provincial-level regions. Over the past five years, its restaurant network has nearly doubled, expanding into regions such as Ningxia and Qinghai.

The company plans to open more than 1,000 new restaurants in China in 2026 while continuing to invest in digitalization, innovation and supply chain development.

Mentholatum, which established a manufacturing facility in Zhongshan, Guangdong in 1991, told Jiemian News it has benefited from strong government support over more than three decades in China.

The company said it expects further policies supporting consumption and opening-up, particularly measures encouraging health-related and emerging consumer sectors.

ZHOU Tao, president of DSM-Firmenich China, said the government’s efforts to expand consumption and integrate technological and industrial innovation have strengthened multinational companies' confidence in long-term development in China.

He said DSM-Firmenich will continue introducing global technologies and solutions to the Chinese market while using local innovation to support global operations.

Henkel also said China's emphasis on strengthening domestic demand and building a strong domestic market reinforces its confidence in the country's long-term prospects.

Anna An, president of Henkel Greater China, said the company has expanded its product portfolio through acquisitions including the Greater China businesses of Shiseido Professional and the Vidal Sassoon brand.

Henkel has also strengthened its innovation capabilities through facilities such as its Asia R&D center for consumer brands in Shanghai and a dedicated production base in Suzhou.

Anna An said Henkel's Shanghai innovation center for adhesive technologies now hosts more than 500 scientists and technical specialists supporting collaborative innovation and helping customers expand globally.