On June 22, 2026, China’s Ministry of Commerce (MOFCOM), National Development and Reform Commission (NDRC), and Ministry of Finance (MOF) jointly released the 2026 Action Plan for Stabilizing and Improving Foreign Investment Utilization — a 15-point plan spanning market access, investment facilitation, promotion, service guarantees, and regulatory optimization. It arrived at a time when FDI into China needs a boost. Here are the five measures that will actually change how you do business.
Why It Matters
FDI inflows into China have been under pressure — foreign direct investment fell 13.7% in the first quarter of 2026 compared to the same period last year, according to MOFCOM data. This follows the trajectory set by the 2026 update to the Foreign Investment Law, which reduced the Negative List from 33 to 30 sectors. The new Action Plan reads less like a policy wish list and more like a checklist of specific fixes to concrete problems foreign-invested enterprises (FIEs) have flagged for years: restrictive cross-border data rules, outdated M&A procedures, and inconsistent tax incentive enforcement.
Not all 15 measures carry equal weight. Five stand out as genuinely transformative for foreign investors operating in or entering China.
1. Financial Sector Access Gets Concrete
The plan commits to letting more foreign institutions use risk management tools, including treasury bond futures, and allowing qualified foreign institutions to conduct fund investment advisory business. It also calls for cross-border financing facilitation quotas for key FIEs and a “proxy documentation” international settlement service for large foreign enterprises through domestic banks.
Previous rounds of financial opening focused on headline market access — qualified investor schemes and bond market access — while leaving day-to-day treasury and financing friction unaddressed. Explicit support for derivatives access and financing quotas signals regulators are now targeting the operational bottlenecks that large FIEs actually face.
What to do: FIEs with material China treasury operations should raise cross-border financing quotas directly with their banks now. Implementation will likely favor early movers on the “key enterprise” lists.
2. Pharma and Biotech Get Faster Market Access
The plan calls for implementation rules on segmented, cross-border production of biologics and chemical drugs by offshore marketing authorization holders, further expansion of pilot zones for biotechnology and wholly foreign-owned hospitals, and encouragement for insurers to bring more innovative drugs and devices into commercial insurance coverage.
Segmented production would let a drug’s manufacturing steps be split across facilities in different countries — something China’s drug administration rules have historically constrained by favoring localized production. Wholly foreign-owned hospital pilots, first floated years ago, have expanded slowly; the renewed commitment here suggests the pace may accelerate.
What to do: Track the segmented-production implementing rules closely. The details will determine whether existing overseas manufacturing networks can finally serve the China market without a full local production build-out.
3. Foreign M&A Rules Get an Overdue Rewrite
China’s core rules governing foreign acquisitions of domestic companies date back to 2006 and have seen only limited updates since. The plan commits to accelerating a revision that will streamline M&A procedures, update consideration and payment requirements, and strengthen coordination between regulators. It will also allow qualified foreign equity investment institutions to participate as strategic investors in securities issuances by listed companies outside their own industry — removing a long-standing requirement that strategic investors operate in a “related industry” to the target.
The industry-relatedness requirement has for years pushed foreign private equity and strategic investors into portfolio-style stakes rather than strategic ones whenever a target sat outside their core sector. Lifting it opens a genuinely new route into China’s listed-company market. For a comparison of greenfield vs. acquisition entry strategies, see our dedicated guide.
What to do: Revisit deals previously shelved solely because of the sector-relatedness rule. Track the revised M&A provisions closely once released, since payment and consideration terms are expected to change alongside procedural streamlining.
4. Cross-Border Data Flow Moves Toward Negative Lists
Free trade zones and pilot cities for expanded services-sector opening are directed to develop “scenario-based, field-level” negative lists for data export, rather than applying uniform rules across all data types. National standards are being developed to define “important data” catalogs by industry — covering manufacturing, telecoms, automotive, pharmaceuticals, aerospace, and civil aviation.
China’s existing cross-border data transfer regime — security assessments, standard contracts, and certification — has been criticized by foreign businesses for its broad, hard-to-scope definition of sensitive data. Sector-specific negative lists and catalogs would replace that uncertainty with narrower, more predictable compliance obligations.
What to do: Watch which pilot cities publish negative lists first and consider routing relevant data flows through FTZs once lists are in place, rather than waiting for a single national standard.
5. Reinvested Profits Gain Clearer Tax Treatment
The plan reaffirms existing tax incentives for foreign investors who reinvest distributed profits directly into China, with instructions to ensure the benefit is “precisely delivered” rather than inconsistently applied. It also directs more reinvestment projects to be added to the major and key foreign investment project lists — which come with expedited land, utility, and approval support.
Historically, priority project status has skewed toward new greenfield investment, leaving reinvestment by existing FIEs comparatively underserved. Putting reinvestment on equal footing signals Beijing wants existing investors to plow profits back into China rather than repatriate them.
What to do: If your FIE holds retained earnings onshore, model reinvestment structures now and apply for major or key project status where reinvestment scale qualifies.
One Data Point
The number to remember: 15 measures, but 5 will do the heavy lifting — financial liberalization, pharma pathways, M&A reform, data negative lists, and reinvested profit incentives. Together, they address the five most persistent friction points foreign investors have reported in every major business confidence survey since 2022.
— China Gateway 360 —
Remote China market entry support, built around execution.
