Reinvestment record set by foreign biz

Foreign businesses, including those from the United States, reinvested a record 162.28 billion yuan ($22.3 billion) in China last year, helped by the country's deferred taxation policy, according to the latest data from the State Taxation Administration.

Under the deferred taxation policy, foreign investors are temporarily exempt from paying certain taxes on the profits they earn from Chinese businesses, as long as those profits are reinvested into projects or sectors within the country.

According to the tax authority, foreign reinvestment benefiting from the policy hit an all-time high, with the total amount soaring 15 percent year-on-year in 2024.

A notable increase came from countries and regions participating in the Belt and Road Initiative, with reinvestment from Singapore and South Korea skyrocketing by 1.4 times and 66.5 percent, respectively.

Notably, reinvestment from Japan and the US also saw strong growth, rising by 1.6 times and 26 percent, respectively, last year.

Chen Binkai, vice-president of the Central University of Finance and Economics, said: "The steady rise in foreign reinvestment signals the resilience of China's economy and its enduring appeal to global investors."

"With policies like deferred taxation, China's magnetic pull for foreign capital will only strengthen, creating an environment where foreign enterprises are more likely to stay and expand," Chen said.

Industry experts said that continued policy support and China's evolving market are likely to help maintain this positive trend, positioning the nation as an increasingly attractive destination for global investors.

The tax authority also highlighted a broadening scope for industries attracting foreign capital last year, with reinvestment funds flowing into 68 major sectors during the period, up from 65 in the previous year.

Key sectors, including specialized equipment manufacturing and pharmaceuticals, saw particularly robust inflows last year, with investments in these industries growing by 1.3 times and 24 percent, respectively.

In addition, western China, particularly the northwest and southwest regions, experienced a significant boost in reinvestment, up 60.6 percent year-on-year in 2024, reflecting growing investor interest in less-developed regions.