China released the Catalogue of Encouraged Industries for Foreign Investment (2025 Edition) on December 24, with the new catalogue set to take effect on February 1, 2026. The update provides foreign investors with clearer, more stable, and more predictable policy guidance, underscoring China’s continued commitment to high-level opening-up and to further improving its foreign investment environment.
The core objective of the updated catalogue is to stabilize foreign investment expectations through more targeted industrial and regional guidance, enhance the quality of foreign investment, and support deeper participation by foreign companies in China’s industrial upgrading and high-quality economic development. The catalogue maintains a two-part structure—comprising a national list and a regional list—and includes 1,679 encouraged items, representing a net increase of 205 items compared with the 2022 edition. Several existing entries have also been refined, further expanding policy coverage and guidance.
In terms of sectoral focus, the new catalogue continues to prioritize advanced manufacturing, with expanded coverage of end products, key components, and critical raw materials, creating broader opportunities for foreign investors to participate in China’s supply chain development. At the same time, it further opens up the modern services sector, encouraging foreign investment in business services, technical services, research and development, and consumer-oriented services, in line with China’s evolving market demand. From a regional perspective, the catalogue places greater emphasis on guiding foreign investment toward central and western China, northeast China, and Hainan, supporting long-term investment aligned with local strengths and development priorities.
Foreign-invested projects listed in the catalogue may benefit from a range of supportive policies, including duty-free imports of eligible self-use equipment, flexible and prioritized access to industrial land, a 15 percent corporate income tax rate in eligible western regions and Hainan, and tax incentives for qualified profit reinvestment. Together, these measures are intended to reduce overall operating costs and further strengthen confidence and certainty for foreign investors operating in China.
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