China still stands out as the world’s manufacturing and investment powerhouse. For any firm considering global expansion, the decision to plant roots there — via a WFOE or other structure — remains compelling. In this post, I’ll walk you through what keeps China at the top of global supply‑chain charts and why Tannet‑Invest sees ongoing value for foreign investors today.
Since the economic reforms and opening up over the past four decades, China has transformed from a largely agrarian, underdeveloped country into the factory floor of the world. That transformation isn’t just legacy — it’s being actively maintained and modernized. As of 2025, China still accounts for close to 28–29% of total global manufacturing output.
One of the core strengths remains its massive, relatively skilled labor pool. Over time, rising labor costs have been matched — and often offset — by increases in worker productivity and the skill level of the workforce.
China also boasts a highly developed shipping, transport and logistics infrastructure that connects manufacturing hubs, ports and export routes efficiently. This ecosystem significantly reduces overheads for businesses aiming to produce at scale and ship domestically or internationally.
Because of these factors, companies benefit from robust supply‑chain networks, economies of scale that are hard to replicate elsewhere, and access to both domestic and global markets — all under one roof.
China isn’t resting on old laurels. Through policies such as Made in China 2025 (MIC2025), the government has pushed for upgrading from low‑cost, low‑value manufacturing to higher‑value, tech-intensive production.
As a result, advanced manufacturing — including sectors like green energy, EV components, high‑tech equipment, and automation — is drawing increasing foreign investment.
For foreign investors, this transition offers a valuable opportunity: instead of competing in low-margin, cost-sensitive goods, they can aim for technology‑driven, higher-margin, quality‑oriented output — and tap into new demand, both domestically and internationally.
China is no longer just the world’s factory. Its domestic consumption and rising middle class have turned it into a powerful consumer market itself. This shift transforms the allure of investing there: you’re not only producing for export — you’re producing for one of the largest and most dynamic markets in the world.
For foreign businesses, this means potential for dual strategies: manufacturing/export and local supply — capturing export margins while building a local brand presence to serve Chinese consumers.
Recent regulatory updates further improve the business environment for foreign investors. The revised investment “encouraged industries” catalogue has expanded, welcoming new foreign investment across advanced manufacturing, clean energy, modern services, and high‑tech sectors.
Foreign‑invested enterprises (FIEs) now enjoy more national‑treatment parity with domestic firms, including access to domestic financing, easier cross‑border arrangements, and preferential treatment in many encouraged sectors.
For companies considering expansion, 2025 thus offers not only legacy advantages (scale, workforce, infrastructure) but also a favorable policy context, lower entry barriers in many sectors, and opportunities in both manufacturing and consumption.
At Tannet‑Group we’ve observed these dynamics closely. We help foreign firms evaluate which sectors and regions in China align with their product type, capital capacity, risk tolerance and long‑term goals. For firms focused on advanced manufacturing or green‑tech, we advise entering via WFOE or FIE structures that leverage the new “encouraged industry” policies.
Our work includes local due‑diligence, regulatory navigation, business‑scope planning, and on‑ground set up — ensuring you don’t just enter China but enter with a strategy built for scale and sustainability.
It’s not all smooth sailing. Rising labor costs, increased competition, and tightening global trade tensions mean firms need a solid plan. Relying solely on low-cost production is no longer a winning formula. But for firms willing to invest in quality, innovation and local market adaptation, China remains a top-tier global manufacturing and investment hub.
If your firm is considering entering or expanding in China, 2025 still presents a compelling window — especially with a partner like us to guide the way.