Editor’s note: Teymur Atayev is an Azerbaijani publicist, historian, political scientist, and host of the program “Aspects of Foreign Affairs” on the Azerbaijani CBC TV channel (broadcasts in Russian). The article expresses the personal opinion of the author and may not coincide with the view of News.Az.
On March 23, during a meeting with the heads of leading multinational companies, Chinese Vice Premier He Lifeng expressed Beijing’s readiness to continue promoting “high-level openness.” In this context, he welcomed the expansion of investments by multinational corporations in China to deepen mutual benefit and achieve shared prosperity.
He Lifeng emphasized that China’s economy, characterized by “strong resilience and vast potential,” remains firmly committed to “continuously improving the business environment and encouraging greater investment from multinational enterprises.”
Chinese Vice Premier He Lifeng meets with Brian Sikes, president and CEO of Cargill, in Beijing, China, March 23, 2025. [Photo/Xinhua]
According to Chinese sources, executives of multinational corporations expressed optimism regarding China’s economic outlook and reaffirmed their intention for “long-term cooperation” with the country. However, analysts paid particular attention to the fact that, in the context of expanding investments in China, the parties “exchanged views,” including on “U.S.-China trade and economic cooperation.” Some experts believe this detail may indicate certain concerns among potential investors—particularly in light of financial and economic indicators reported over the past year.
Specifically, public sources referencing data from China’s Ministry of Commerce indicate that foreign direct investment (FDI) into mainland China dropped by more than 27% in 2024, amounting to nearly $115 billion. This represents the steepest decline since such statistics began being tracked in 2008. Considering that FDI had already fallen by 8% in 2023, experts point to an unfavorable trend for China—especially when compared with 2021, when foreign investment hit a record $344 billion. It is also noted that in 2024, the net outflow of FDI from China reached nearly $170 billion, marking the highest level since 1990.
Observers emphasize, however, that this should not be interpreted as a sign of a deteriorating business climate in China. Rather, many foreign companies are being forced to reduce their investments “under pressure from their respective governments.” Nonetheless, several media outlets have reported a notable increase in direct investment in China from Germany, as German companies “have ignored calls from their government to diversify operations into geopolitically less risky markets.”
Still, this trend has raised red flags. Experts also point out that as early as March 18—five days before He Lifeng’s remarks—China’s Minister of Commerce Wang Wentao had urged European companies to increase their investments in the country, citing the “continued stability” of China’s trade policy towards “partners, including the EU.” He made these comments during a meeting with Airbus CEO Guillaume Faury. According to Wang, the global economy is currently facing significant challenges, but “the fundamental trend of long-term improvement in China’s economy remains unchanged,” as “despite changes in the external environment, China’s policy and outlook remain stable.” Wang went on to express hope that European companies, including Airbus, would take advantage of the available opportunities to expand their investments in China. Mr. Faury, noting his desire to avoid “any uncertainty associated with additional tariff policies,” voiced optimism about the Chinese market and confirmed that Airbus would continue to grow its investments and presence in China “to support its long-term development.”
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It is also worth noting that in the second half of February, Chinese authorities unveiled an action plan to stabilize foreign investment through 2025. The plan emphasizes that foreign capital is “one of the key drivers of high-level opening-up, plays a vital role in developing new-quality productive forces, and facilitates modernization with Chinese characteristics.” According to the document, Beijing is ready to support “pilot regions” in implementing open policies across sectors such as value-added telecommunications, biotechnology, and wholly foreign-owned medical institutions—offering comprehensive services for foreign-invested projects in these areas. The plan also stresses the importance of encouraging foreign investment in China’s equity markets to attract higher-quality FDI into publicly listed companies. Additionally, it outlines plans to remove restrictions on “domestic lending for foreign-invested enterprises, allowing them to use local financing for equity investments.”
Earlier, the People’s Bank of China also released a document indicating Beijing’s intention to allow foreign financial institutions to “offer new types of financial services within free trade zones.”
In this context, He Lifeng’s remarks at the meeting with multinational business leaders—mentioned at the outset of this article—serve as a deliberate signal of the Chinese market’s stability and long-term potential for foreign investment. Given the current global geopolitical uncertainties—including economic turbulence driven by tariff and customs policies, where U.S.-China relations remain pivotal—Beijing’s official position is undoubtedly of great significance. The key question, however, remains: will this be enough to reverse the downward trend in FDI inflows to China?
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