China's FDI Drops but High-Tech Investments Thrive in 2025

Eva Popov -

In a surprising twist, foreign direct investment (FDI) in China witnessed a significant 13.2% drop, totaling CNY 358.19 billion from January to May 2025. Yet, amid this overall decline, high-tech sectors have dramatically surged, painting a complex picture of China’s investment landscape.

The Manufacturing and Services Tug-of-War

Interestingly, the manufacturing industry drew CNY 91.52 billion in foreign capital, leaving the services sector with a lion’s share of CNY 259.64 billion. This shift highlights a reshaping of priorities within China’s economic structure, as the nation ventures deeper into the technology-driven era.

High-Tech: The Star Performer

High-tech industries emerged as frontrunners, reeling in CNY 109.04 billion in foreign investment. Sectors like e-commerce services grew by a staggering 146%, with aerospace and equipment manufacturing seeing a remarkable 74.9% rise. Chemical pharmaceutical manufacturing and medical equipment manufacturing weren’t left behind, growing by 59.2% and 20%, respectively.

Regional Variations in Investment

ASEAN countries played a significant role, with FDI from these nations increasing by 20.5%. Japan, the United Kingdom, South Korea, and Germany also showed substantial investment growth, rising by 70.2%, 60.9%, 10.3%, and 7.1%, respectively. These numbers highlight a keen interest and belief in China’s economic potential, especially in high-tech sectors.

Balancing Challenges and Opportunities

The intriguing blend of declining FDI and booming tech sectors reflects both challenges and opportunities. While overall FDI has slipped, it’s clear that investors are increasingly turning towards innovative and tech-forward areas, signaling a strategic pivot rather than an absolute retreat from China’s market.

According to TradingView, this evolving balance demonstrates a nuanced investor confidence that aligns with global technological trends. Such dynamics suggest that while traditional sectors might be losing steam, the future of FDI lies in innovation and high technology, redefining China’s economic narrative for the better.