China launches pilot program for foreign investment reporting to support expansion

China's Ministry of Commerce (MOFCOM) on Wednesday announced the launch of a pilot program for a foreign investment information reporting system in eight provinces and municipalities, in an effort to attract more foreign investment and support foreign-invested enterprises to expand reinvestment in the country.

When a foreign-invested enterprise establishes a new firm in China under its own name, increases capital in an existing firm, or acquires equity from investors of an invested enterprise (excluding multi-level investments), it should fulfill its information reporting obligations in accordance with the Chinese law, according to a notice issued by the MOFCOM.

The reporting of investment information by foreign-invested enterprises in China will be steadily advanced through the pilot program, and the initial pilot regions are East China's Jiangsu, Shanghai, North China's Tianjin, Northeast China's Liaoning, North China's Hebei, Central China's Hunan, Northwest China's Shaanxi, and Southwest China's Chongqing. The measures will take effect on July 1, the notice said.

The 2025 Action Plan for Stabilizing Foreign Investment, previously released in February, stated that the responsible authorities would carry out a pilot program for foreign-invested enterprises to report investment information in China.

The pilot program lessens foreign investment reporting requirements, clarifying the scope, enhancing reporting accuracy, and reducing the burden on foreign investors, Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Wednesday.

The previous regulation for reporting foreign investment information were enacted in 2020. The Foreign Investment Law stipulates that foreign investment refers to direct or indirect investment by foreign investors in China, and that foreign investors or foreign-invested enterprises must report investment information to the commerce authorities in China, according to a statement released by the MOFCOM and the State Administration for Market Regulation at that time.

Foreign investors or foreign-invested enterprises are required to report investment information when establishing companies or partnerships in China (including in the financial sector), foreign and regional firms engaging in production or business activities in China, as well as setting up permanent representative offices in China, or investing in new enterprises in China, including multi-level investments.

The Chinese market's attractiveness to foreign investment keeps growing, as the country continuously expands opening-up, reduces barriers in trade and investment, and facilitate cross-border personnel flows, which enables businesses to operate at lower costs, Zhou said.

Chinese officials have repeatedly vowed to further attract foreign investment. Commenting on growing foreign investment in China at a regular press briefing on June 10, Chinese Foreign Ministry spokesperson Lin Jian noted that the fact that more foreign businesses are betting on China says a lot about the stability and certainty that China's high-quality development and opening-up provide and how much they are valued by the rest of the world.

In the first five months of this year, over 73,000 foreign companies generated imports and exports in China, hitting a five-year high, Lin noted. "From a manufacturing giant to an innovation powerhouse, China continues to offer the world opportunities through its progress. We will continue to improve the business environment, and provide foreign businesses with more policy incentives," the spokesperson said.