In October 2026, Qiuyi YANG, Associate Research Fellow at the Fudan Development Institute, was interviewed by China Business Journal on the continued inflow of foreign investment into the Chinese market, explaining its underlying logic and industrial impact. In her view, China can simultaneously offer a vast market, well-developed industrial support and abundant innovation opportunities, which is the core reason foreign investors remain confident in the long run: an ultra-large market and multi-tiered demand give enterprises long-term room for growth, while the digital and green transformation of manufacturing keeps generating new business opportunities. She noted that China’s advantages in attracting foreign investment are undergoing a structural shift—from production costs and export-manufacturing conditions toward comprehensive efficiency and innovation advantages centered on market responsiveness, engineering capability, industrial synergy and the innovation ecosystem. Backed by complete supply chains, engineering talent and rich application scenarios, companies can integrate R&D, manufacturing and market feedback and shorten product commercialization cycles. Industrial support, talent reserves and the ultra-large market reinforce one another and are key to foreign investors’ long-term presence in China; in particular, the synergy advantages of long-accumulated industrial clusters can hardly be replicated by relocating factories. She argued that data for the first half of 2026 confirm foreign investors’ stronger willingness to invest long-term in China, with growth in earnings reinvestment reflecting the confidence of existing enterprises. When multinationals complete their full-chain layouts in China, they do more than expand capacity—they can drive local industries to upgrade toward higher value-added, although the release of this spillover effect depends on local firms’ technology absorption capacity and the institutional environment. Attracting foreign investment should therefore focus more on R&D, talent and supply-chain synergy, so that incremental FDI translates into sustained momentum for industrial upgrading and innovation-driven development.

Translated by FDDI

Full text in Chinese available at:

https://fddi.fudan.edu.cn/24/57/c18965a795735/page.htm