China Sees 35,000 New Foreign-Invested Firms in H1 2026

China's New Foreign-Firm Registrations Rise 7 Percent in First Half

China saw 35,000 newly established foreign-invested enterprises in the first half of 2026, up 7 percent year on year, the State Administration for Market Regulation (SAMR) said on Saturday. Growth was spread across major exporting provinces, border regions and the consumer services sector, a sign that foreign capital is still finding reasons to enter the Chinese market even as Washington and Brussels tighten technology and trade restrictions. For Japanese business, which operates roughly 30,000 branches inside China, the numbers land the same week the Japanese Chamber of Commerce and Industry in China (JCCIC) reports that about 85 percent of its members intend to stay committed to the market.

Tags: foreign-invested enterprises, foreign direct investment, China economy, Hainan Free Trade Port, JCCIC, Japanese companies in China, SAMR, high-tech FDI, BRI investment, China market opening, consumer services

Hainan and the Exporting Provinces Lead New Registrations

Among the major exporting provinces, the number of newly established foreign-invested enterprises rose 38.6 percent year on year in Hainan, 15.2 percent in Shandong, 8.1 percent in Guangdong and 6.8 percent in Jiangsu, according to the SAMR. The Hainan surge tracks the island-wide special customs operations that took effect at the Hainan Free Trade Port on December 18, 2025, which created a duty-free, single-customs-zone regime designed to mimic the trading environment of a free port.

Provincial data collected before the full half-year count pointed the same way. By April 29, Hainan had added 1,004 new foreign firms, up 35.86 percent year on year, and officials say the island operates the shortest negative list for foreign investment in the country. The pattern matters for Japanese investors in particular: Hainan's services-heavy opening, including tourism, healthcare and duty-free retail, overlaps directly with the sectors where Japanese companies hold established brand strength.

Border Provinces and BRI Partners Accelerate

The SAMR data also showed sharp growth along China's land borders, where new foreign-invested enterprise registrations rose 79.5 percent year on year in Heilongjiang, 29.1 percent in the Inner Mongolia Autonomous Region, 16.6 percent in Guangxi and 12.0 percent in Jilin. The border gains are consistent with China's push to deepen economic corridors with Russia, Mongolia and Southeast Asia as Western markets become more restrictive for Chinese exports.

Investment from Belt and Road Initiative (BRI) partner countries continued to climb as well. China registered 11,000 new enterprises backed by BRI partner countries, Arab countries and African Union countries in the first half, up 19.3 percent, 20.6 percent and 42.8 percent respectively. The composition of new investors is therefore broadening well beyond the traditional manufacturing base of Hong Kong, Taiwan, the United States and Japan, even as those established sources remain the largest stock of foreign capital.

The Consumer Market Becomes a New Magnet

By sector, the SAMR found that China's consumer market is emerging as a new area attracting foreign investment. Newly established foreign-invested enterprises in health and social work rose 27.1 percent year on year, while those in wholesale and retail rose 11.9 percent and those in accommodation and catering grew 11.7 percent. The shift reflects a structural change in the Chinese economy, where services and domestic consumption now contribute a larger share of growth than heavy industry did in the export-led decades.

For Japanese chains in retail, restaurants, convenience stores and eldercare, the sector mix is familiar territory. Several Japanese retail and food-service groups have been expanding in China's lower-tier cities, where competition from domestic brands is less intense and consumer income is rising faster than the national average. The new registration data suggests that the services door, which Beijing has promised to open wider, is now showing up in the statistics.

Japan's own demographic trajectory gives its companies a rare comparative advantage in this part of the market. The health and social work category, which grew 27.1 percent, includes eldercare, a field where Japanese providers have built decades of operating experience while serving a rapidly aging population at home, and where Chinese provinces are now actively inviting foreign participation as their own elderly cohorts expand. For Japanese operators, that makes the services opening less of a gamble and more of a direct export of proven business models.

High-Tech FDI and the 15-Measure Action Plan

Separate data from the Ministry of Commerce (MOFCOM) showed that almost 4,800 foreign-funded enterprises made additional investments in China in the first half of this year, while foreign direct investment in high-tech industries surged 33.2 percent year on year. The reinvestment figure is a useful counterpoint to the often-cited decline in headline FDI: existing investors are doubling down even when new greenfield projects are slower to start.

In June, MOFCOM and other government departments released an action plan to stabilize and optimize foreign investment utilization, detailing 15 measures. The plan prioritizes wider market access in the services sector, promotes the "Invest China" initiative, and commits to addressing foreign-funded enterprises' concerns over equal participation in government procurement and fair access to business operations. Those procurement and market-access issues have been the top recurring complaints in foreign chamber surveys for years, including the JCCIC's annual white paper.

Japan's 30,000-Branch Question

The JCCIC released its White Paper on the Chinese Economy and Japanese Enterprises 2026 in Beijing on June 11, drawing on input from 8,102 Japanese-funded enterprises and containing 572 recommendations across 27 chapters. JCCIC President Tetsuro Homma said the proportion of Japanese-funded enterprises in China choosing to stay committed to the Chinese market is about 85 percent, and noted that of more than 70,000 Japanese overseas branches worldwide, roughly 30,000 are located in China.

A Japan External Trade Organization survey cited in the white paper found that over the next one to two years, 21.3 percent of Japanese-funded enterprises in China intend to expand while 64.3 percent plan to maintain the status quo. The white paper was compiled against a difficult backdrop: reciprocal tariff policies from the United States have disrupted the trading system, and Japan-China relations were strained after Prime Minister Sanae Takaichi's remarks on Taiwan. The chamber also raised the rare earth export issue, which Beijing has used in the broader technology rivalry with Washington and Tokyo.

What to Watch For

The half-year registration data will be followed by the July-August monthly figures and, later this year, by the first full-year count since the Hainan free port regime went operational. Watch whether the services-heavy sector mix holds, whether Japanese and European investors start new greenfield projects rather than only reinvesting, and how the 15-measure action plan translates into measurable procurement and licensing changes at the provincial level.

For Asia-Pacific readers, the deeper signal is that China's investment story has not ended; it has rotated. The center of gravity is moving from export manufacturing toward services, consumer brands, high-tech reinvestment and the border economy, and Japanese companies are choosing, in large numbers, to remain inside that story even as the geopolitics around it grow harder.

By Kenji Tanaka, Staff Writer

This article was produced with AI-assisted research and editorial support. Sources: CGTN, Xinhua, Gov.cn, Bastille Post, Global Times, JETRO.