China's new growth model attracts the world

Editor's note: Moiz Farooq is executive editor of Pakistan Economic Net and Daily Ittehad Media Group. The article reflects the author's opinions and not necessarily the views of CGTN.

China's economic landscape is undergoing a significant transformation shaped by global shifts and domestic priorities. As the world navigates new forms of uncertainty, from supply chain readjustments to geopolitical tensions, many observers have been closely watching China's approach to economic reorientation. Foreign direct investment remains a crucial part of this process because it supports innovation, technological upgrading and long-term growth. Recent data from 2025 reveals that China is not retreating from the global economy. Instead, it is reshaping its development model in a more strategic and sustainable direction that prioritises quality, stability and long-term resilience.

The international environment has changed considerably in recent years. Global investment flows are increasingly influenced by economic fragmentation, rising protectionism and competition among major economies. In this evolving landscape, China continues to serve as a stabilising force for global manufacturing and consumption. Despite the many pressures facing the global economy, China remains deeply integrated into international supply chains and continues to provide a dependable market for companies around the world. China's response to external challenges has been guided by a clear vision that focuses on technological progress, self-reliance in critical sectors and greater openness to high-quality foreign investment.

The trends seen in early and mid-2025 offer important insights into China's path forward. While the total value of foreign direct investment experienced a short-term decline, the number of newly registered foreign-invested enterprises has been growing steadily. This reveals continued confidence from global businesses in the Chinese economy. Companies are not withdrawing from China. Instead, they are adapting to new opportunities that arise from China's technological advancement and consumption-driven development. The nature of investment is changing as firms target sectors that offer long-term growth potential. These include high technology, smart manufacturing, digital services and new energy industries.

A defining feature of the current investment patterns is the strong performance of advanced manufacturing and high technology fields. China's leadership in areas such as robotics, new energy vehicles, clean power technology, semiconductor equipment and advanced materials has attracted international companies looking for reliable industrial foundations and innovation ecosystems. The combination of a world-class supply chain network, a large pool of skilled talent and a vast domestic market makes China an ideal location for multinational firms that want to participate in the industries of the future. Recent expansions by foreign companies in automotive production, biomedical research and intelligent equipment show that confidence in China remains strong.

China's policy reforms have played a crucial role in supporting this economic shift. The government has taken steady steps to improve the business environment, enhance intellectual property protection and expand market access in many sectors. New pilot zones across several provinces allow for experimentation with regulatory innovations that make it easier for foreign enterprises to invest, build partnerships and introduce advanced technologies. These reforms reflect China's long-term vision for high-quality development and its commitment to maintaining mutually beneficial economic ties with the world.

At the heart of China's reorientation is a growing emphasis on domestic consumption as a source of sustainable economic growth. The rise of the middle class, ongoing urbanisation and the expansion of digital consumer platforms have created powerful new engines for economic activity. Foreign companies have recognised the potential of this transformation, especially as consumer demand grows for quality services, advanced technology products and environmentally friendly goods. China's shift toward a consumption-based model has enhanced economic stability and will provide international investors with a long-term market that continues to grow even during periods of global uncertainty.

Regional growth hubs are also shaping the direction of foreign investment in China. The Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area, and the Chengdu-Chongqing region have emerged as major clusters of innovation and industrialisation. These regions offer integrated infrastructure, efficient transportation networks and concentrated pools of talent. Their focus on research development and high-tech industries makes them attractive destinations for international companies seeking opportunities in fast-growing sectors. By strengthening regional integration and reducing administrative barriers, China is creating dynamic investment zones that support national development priorities.

China's commitment to green development is another important factor driving investment trends. As the country pursues its long-term goals for ecological civilisation, new opportunities are emerging in renewable energy, green supply chains, carbon trading and environmentally conscious manufacturing. China's leadership in solar technology, electric mobility and energy storage has made it a global center for sustainable innovation. Foreign firms seeking to expand their presence in green industries view China as a strategic partner that combines market potential with policy support and technological expertise.

Through this process of reorientation, China continues to serve as a stable anchor for investors. The country's political stability, world-class infrastructure and integrated industrial system provide a foundation that is difficult to match. Multinational companies remain committed to China because they recognise that the long-term advantages outweigh short-term fluctuations. Opportunities also continue to expand through regional trade partnerships and the Belt and Road Initiative, both of which support deeper economic cooperation and improved global connectivity.

Looking ahead to 2026 and beyond, China is positioned to strengthen its leadership in high-tech innovation, smart manufacturing and sustainable development. The 15th Five-Year Plan (2026-30) places great importance on innovation-driven growth, high-value industries and coordinated regional expansion. As China builds a modernised economic system that is more resilient and future-oriented, foreign investors will find even greater opportunities across advanced technology, consumption-driven sectors and environmentally friendly industries.

China's economic reorientation shows that the country is not simply adjusting to global change. It is shaping the next chapter of global economic development. The continued interest of foreign investors combined with China's commitment to reform and innovation demonstrates that China will remain a central force in the future world economy.