Opportunities for Global Firms in China’s 15th Five-Year Plan

For global firms seeking growth in the Chinese market, the upcoming 15th Five-Year Plan (2026-2030) signals a fundamental realignment of market strategies. More importantly, it reflects a transformation in the nature of "the China opportunity": shifting from growth driven by demographic dividends and infrastructure investment toward deep participation in industrial upgrading, technological innovation, and a more rules-based framework of opening up.

Despite ongoing challenges in global Foreign Direct Investment (FDI), China continues to demonstrate strong fundamentals in attracting and retaining foreign capital. In 2024, the number of newly established foreign-invested enterprises in China grew by 9.9% year-on-year; by the end of 2023, the total number of foreign enterprises operating in China reached 465,000. A recent KPMG survey further reveals that 94% of surveyed global firms plan to continue investing in China, with 75% expecting to maintain or increase their investment levels in 2025.

94% of surveyed global firms plan to continue investing in China, with 75% expecting to maintain or increase their investment levels in 2025.

For foreign firms seeking sustainable growth over the next five years and beyond, understanding the policy logic behind the "15th Five-Year Plan" is essential.

1. Policy Landscape: Three Policy Dividends for Foreign Enterprises

Within the policy framework shaped by China's 15th Five-Year Plan, several aspects stand out, creating a clearer and more sustainable operating environment for foreign firms.

1. Higher-Level Opening Up

China is accelerating the alignment of domestic regulations with international rules and standards, significantly lowering institutional barriers to market entry. The national negative list for foreign investment access has been slashed from 63 items in 2017 to just 29 items in 2024, with all restrictions in the manufacturing sector now removed.

Simultaneously, China is expanding pilot programs for institutional opening through Pilot Free Trade Zones (FTZs) and the Hainan Free Trade Port. China has added nine additional cities, including Dalian, Ningbo, Xiamen, and Qingdao, as pilot sites to conduct “stress tests,” paving the way for further institutional opening measures for global firms entering China.

2. A Level Playing Field

China is redefining its "competitive advantage" through the synergy of an efficient market and a proactive government. The 15th Five-Year Plan ensures that foreign enterprises enjoy national treatment in key operational areas such as government procurement, standard-setting, licensing and approvals, and access to production factors.

The recently released "Catalogue of Encouraged Industries for Foreign Investment (2025 Edition)" increased the total number of encouraged items to 1,679, making the direction of "where to invest" clearer than ever. A robust suite of incentives—including import duty exemptions and flexible land policies—is provided for these enterprises. Notably, the 15% Corporate Income Tax (CIT) incentive in Hainan and Western China offers a strategic pivot for firms looking to optimize regional tax structures and reinvest global profits with maximum efficiency.

3. Integration into China’s Innovation Ecosystem

As domestic companies upgrade rapidly and national innovation capabilities strengthen, the role of global firms is evolving from "technology exporters" to collaborative innovation partners. Universal subsidy policies for foreign investment are being phased out in favor of policy support increasingly focused on technological upgrades and high-value innovation.
By 2023, high-tech industries accounted for 37.4% of China’s total actual utilized foreign capital, an increase of over 10 percentage points compared to 2017. This underscores that China expects foreign investment to bring not just capital, but expertise, R&D capabilities, and ecosystem participation.

2. Industry Outlook: High-Quality Growth Opportunities

Based on policy priorities and shifts in the foreign investment landscape, several sectors are particularly well-positioned for the next five years:

Healthcare and Life Sciences: 

China's 15th Five-Year Plan continues to prioritize the opening of the service sector, explicitly supporting the development of innovative drugs and medical devices. The 2025 Encouraged Catalogue covers frontiers such as nucleic acid drugs and advanced non-invasive medical equipment. Standards for drug review and approval are now largely aligned with international norms, allowing for synchronized global R&D and parallel market filings.

Meanwhile, reforms on the supply side of commercial health insurance and healthcare services are driving differentiated development across public hospitals, private hospitals, joint-venture hospitals, and wholly foreign-owned hospitals, creating new entry points and opportunities for foreign-invested healthcare enterprises.

Green Tech and Environmental Solutions: 

This period is critical for China to meet its climate and sustainability goals. The emphasis on green transformation is generating massive demand for environmental technologies. Opportunities are particularly prominent in renewable energy, EV supply chains, energy-efficiency technologies, and the circular economy. In 2025, production of EVs, lithium-ion batteries, and solar cells grew by 22.7%, 44.2%, and 16.8% respectively.

Digital Economy and High-End Services: 

The plan calls for an accelerated "Digital China," further relaxing foreign access limits in value-added telecommunications. Notably, foreign ownership limits have been removed for services like app stores and internet access. The "AI Plus" initiative aims to integrate AI deeply with the real economy. From Jan-Oct 2025, actual utilized foreign investment in e-commerce services grew by over 170% year-on-year. From intelligent manufacturing solutions to data-driven services, both the infrastructure layer and application layer of the digital economy present significant opportunities.

3. A Practical Checklist for Global Firms during the 15th Five-Year Plan

The 15th Five-Year Plan offers a clear roadmap and tangible incentives for companies willing to participate in China’s industrial upgrading, innovation agenda, and green transition. Consider these five steps before launching or expanding your strategy:

1. Benchmark Against Policy Incentives: Confirm if your business falls under the Encouraged Catalogue (2025 Edition) to unlock tax breaks and resource priority.
2. Select the Right Entry Mode: Evaluate whether you need a full legal entity or a leaner Employer of Record (EOR) model, especially when testing newly opened sectors like value-added telecoms.
3. Upgrade Talent Strategy: Shift focus from pure management roles to R&D and technical talent in AI, life sciences, and clean energy. Recruitment Process Outsourcing (RPO) can help secure scarce local expertise.
4. Leverage Institutional Pilot Zones: Explore the benefits of the new pilot cities and the Hainan Free Trade Port, particularly in the healthcare and digital economy sectors.
5. Embed Local Innovation: Position your China operations toward collaborative innovation by strengthening local R&D centers and partnerships.

Why Act Now?

China's 15th Five-Year Plan marks a new round of rules-based opening. While opportunities are expanding, compliance complexity and the competition for top talent are intensifying.

While opportunities are expanding, compliance complexity and the competition for top talent are intensifying.

As your strategic partner, we help global firms:

• Enter the China market rapidly and compliantly through optimised setup solutions.
• Test the market with minimal risk using the EOR model.
• Build innovation-ready local teams through precision talent acquisition.

📩 Contact us today to schedule a free China policy benchmarking consultation and explore your roadmap for sustainable growth.

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