If you’re planning to set up a company in China — via a WFOE, FIE or other structure — it’s crucial to understand which industries the authorities encourage, which are neutral, and which remain restricted or closed to foreign investment. This matters not only for getting approval but also for tapping incentives, avoiding pitfalls and aligning with policy direction. In this guide, I break down where foreign money is most welcome in 2025, where caution is required, and why.
Under current Chinese investment policy, foreign‑invested enterprises (FIEs) are governed under the same laws that apply to domestic firms.
At the same time, the country relies on two complementary tools to manage foreign investment:
If your business aligns with the encouraged categories, you stand to get advantages and smoother setup. If not — or if it sits in a restricted area — you may face hurdles or be blocked entirely.
Recent revisions (2024–2025) expanded the slate of sectors where foreign investment is encouraged. Highlights include advanced manufacturing, high‑tech industries, modern services, green development, and certain regional industries, especially in central/western/northeastern China.
Here are some of the most attractive sectors now:
Advanced Manufacturing and High-Tech Production. This includes robotics, automation, EV components, aerospace-related manufacturing, high‑precision machinery, and other advanced industrial production. The move follows the drive under MIC2025 to shift away from low-cost, low-value output toward technologically sophisticated manufacturing.
Clean Technology, Environmental & Green Industries. As China tackles air quality, carbon emissions and sustainability goals, clean‑tech manufacturing, renewable energy equipment production, environmental‑service providers, and related sectors are being prioritized for foreign investment.
Modern Services & Producer‑oriented Services. Beyond manufacturing, service sectors such as technical services, engineering, R&D centers, modern supply‑chain services, logistics, and other production‑oriented services are now open and prioritized. Businesses offering these services — especially with foreign expertise — are well‑positioned.
Healthcare, Biotech, Medical Devices and Wellness‑related Industries. With shifting demographics, rising demand for quality healthcare, ageing population segments and increased domestic demand for quality health services, these sectors are becoming more accessible for foreign investment.
Regional & Infrastructure‑adjacent Sectors in Emerging Zones. As coastal megacities become crowded and expensive, central, western and northeastern provinces are being incentivized to attract foreign capital. Industrial projects that meet land‑use efficiency or regional development goals are often eligible for preferential terms.
Not all sectors are open. The national “Negative List” defines areas where foreign investment is restricted or prohibited. While China has relaxed many restrictions, sensitive sectors remain off-limits or subject to stricter conditions.
Typical restricted or carefully regulated areas include certain parts of media and entertainment, some mining and rare-earth extraction, certain state‑security related services, and sectors deemed strategic or politically sensitive.
Also, even in open sectors, compliance standards, environmental regulations, or local licensing requirements may still be stringent. What’s “allowed” doesn’t always mean “easy.”
We run a full compliance check against the latest investment catalogue and negative list to make sure your WFOE structure matches both your goals and what’s permitted.
In early 2025 the government rolled out an updated action plan to stabilize and attract foreign investment. The plan singled out sectors like high‑tech, modern services, green industries, livestock/farm‑related business, and regional industrial promotion as priorities.
At the same time, the reforms strengthened equal treatment for foreign-invested enterprises (national treatment), opened access to domestic loans, eased cross‑border data and personnel flows, and simplified processes for establishing headquarters or investment companies in China.
What this means is: if your business aligns with the encouraged sectors, you’re getting these advantages — making 2025 arguably one of the best years in recent memory to invest in China.
We don’t just tell you “Yes you can invest.” We help you align your business model with the policies, choose the right city/region, define a compliant business scope, and structure your WFOE in a way that maximizes incentives while minimizing regulatory risks.
Whether you’re in clean tech, medical devices, advanced manufacturing, services or regional‑focus industries — we assess the opportunity, do the paperwork, handle local liaising, and guide you through compliance so you can focus on building your business.
China’s investment landscape in 2025 offers real opportunities — especially for foreign investors willing to align with its shifting policy and economic priorities. With expanded access across advanced manufacturing, clean tech, services and more, the timing and environment are favorable.
Still, regulatory clarity and compliance matter. Understanding where investment is encouraged — and where it’s restricted — will determine whether your ventures succeed or stall.
For those ready to act, partnering with someone who knows the terrain — both the map and the current political winds — is critical. For us at Tannet‑Group, helping you navigate this landscape is exactly what we do.
If you’d like to explore whether your business idea fits 2025’s investment climate, get in touch — we’ll run a full, tailored feasibility assessment for you.