Why is China so attractive to international capital? Analysis shows that in addition to the reasons such as its openness, stable economy and huge market, China’s fair and just business environment is an important factor in attracting foreign investors.

In recent years, China has achieved remarkable progress in creating a fair and just business environment. Most notably, it has continuously enhanced its law-based business environment and related legal system. According to the Regulations on Optimizing the Business Environment, which came into force on January 1, 2020, the state shall adhere to the equality of rights, opportunities and rules and ensure equal legal protection of economic entities under all forms of ownership. In the meantime, China has revised its anti-monopoly and fair competition laws, providing solid institutional guarantees for fair market competition.

China is implementing a negative-list approach for market access, and with the number of items on negative lists being continuously reduced, the market access has been continuously increased. At the same time, abolishing hidden barriers and better regulating the administrative approval process is reducing the start up time and effort for enterprises. In the current 2024 version of the negative list for foreign investment access, the number of restrictions was reduced from 31 to 29, with zero restrictions on the manufacturing sector.

The environment for fair competition in China has continued to improve. Local governments have abolished policies and regulations that impede fair competition in accordance with the Regulations on Optimizing the Business Environment and strengthened anti-monopoly law enforcement, making the market fairer and more orderly. Having implemented the Foreign Investment Law to a high degree, China has eliminated the requirement for approval and filing with the Ministry of Commerce for establishing foreign-funded enterprises, enabling them to participate in market competition on an equal footing in accordance with the law and providing them more equal?treatment.

The China Council for the Promotion of International Trade released its 2024 China Business Environment Research Report in January, which shows that Chinese and foreign-funded enterprises are very satisfied with China’s business environment. According to the report, the surveyed companies rated China’s overall business environment 4.37 out of 5 points, with nearly 90 percent of them expressing “very satisfied” or “relatively satisfied,” up 2.1 percentage points from 2023.

According to the Business Confidence Survey 2024-25 launched by the German Chamber of Commerce in China, among the 546 member companies participating in the survey, 92 percent plan to maintain their operations in China.

For foreign-funded enterprises, as China opens wider to the outside world, it not only provides a huge and growing market, but more importantly, this is a market that is constantly optimized and committed to high-quality development. Participating in a huge market with fair and well-regulated competition leads to increased strength for foreign businesses, as been well demonstrated by Volkswagen and Piovan.