Chinese Foreign Investment Puzzle

China’s growing middle class remains a magnet for foreign businesses, regardless of government politics or policies. Non-financial foreign direct investment into the world's second-largest economy rose 27.8% so far in 2021 to $113.78 billion. However, the enticing market opportunity has been tempered by new Chinese regulations. Opportunities are still robust but have become more targeted than in the past. Chinese authorities kicked off their latest five-year development plan this year with ambitious goals for technological advancement and a reliance on domestic consumption over exports. In the last few weeks, Beijing and Shenzhen announced new benefits for foreign capital in special development districts that could present lucrative opportunities for foreign business investment.