China’s 12 Measures to Encourage Foreign Reinvestment | July 2025

1. Local Project Databases and Priority Support

Local governments are now building databases of reinvestment-focused projects by foreign companies. Projects listed will receive the same level of policy support typically reserved for key national-level investments—such as fast-track approvals and priority services.

2. More Flexible Industrial Land Options

Foreign companies can now access industrial land through flexible arrangements, such as:

• Long-term leases
• Lease-before-transfer models
• Transfers with adjustable durations

This approach lowers upfront costs and gives businesses more control over land use.

3. Tax Incentives for Reinvested Profits

Qualified reinvestments may benefit from new tax incentives, including:

• A 10% corporate income tax credit for eligible reinvested profits
• Preferential treatment for importing production equipment and technology

These policies aim to make reinvestment more financially attractive than profit repatriation.

4. Easier Capital Movement and Financing Access

FIEs can now:

• Legally reinvest foreign exchange–denominated profits earned in China, without new inflow from abroad
• Use “green channels” for faster access to funds, including shareholder loans and panda bonds (CNY-denominated bonds issued by overseas firms)

The goal is to reduce red tape while keeping capital within China’s borders.

5. Financial Product Innovation

Chinese financial institutions are encouraged to tailor new tools, products, and services for foreign reinvestors. These may include:

• Custom credit products
• Risk-managed investment tools
• Cross-border financing solutions

6. Extra Support for Encouraged Industries

Projects falling under China’s Catalogue of Encouraged Industries for Foreign Investment receive enhanced benefits, such as:

• Additional tax breaks
• Lower import tariffs
• Simplified administrative procedures

If your reinvestment project aligns with national industrial priorities, the policy advantages may be significant.

7. Faster Setup for New or Expanded Entities

Setting up new companies or expanding your presence in China has become simpler. Registration and approval processes for reinvested entities have been streamlined to reduce delays.

8. Pilot Reinvestment Reporting Programs

To increase policy precision and reduce overregulation, select regions will trial investment activity tracking programs for foreign-invested firms. This helps ensure reinvestment is accurately recognized and supported.

9. Better Information Sharing Across Agencies

Government departments are improving how they share reinvestment data—allowing for more coordinated policy support and quicker issue resolution for foreign firms.

Note: Although the official announcement refers to “12 measures,” most government and business sources group them into broader categories—covering areas such as land use, finance, taxation, project support, and regulatory procedures. While the full regulations may include more detailed sub-measures, the overarching goal is clear: to lower barriers, encourage foreign companies to retain capital in China, and create a more favorable reinvestment environment.

What This Means for Your Business

China is sending a clear signal: foreign capital that stays and grows in the country will be rewarded. These 12 measures aim to reduce operational friction, cut costs, and align foreign reinvestment with national development goals.

While implementation details are still being finalized, this is an opportune moment for CFOs and decision-makers to revisit their reinvestment strategies in China.