The Catalogue of Encouraged Industries for Foreign Investment is a policy instrument issued jointly by China’s National Development and Reform Commission (NDRC) and Ministry of Commerce (MOFCOM) that identifies industries where foreign investment is actively encouraged and eligible for preferential policies, including tax incentives, customs duty exemptions, and supportive land-use arrangements.
The 2025 edition of the Catalogue, effective 1 February 2026, replaces the 2022 edition and expands the list of encouraged sectors and forms part of China’s broader foreign investment regulatory framework alongside the Foreign Investment Law and the Foreign Investment Negative List.
Key Takeaways
- China’s 2025 Catalogue of Encouraged Industries for Foreign Investment, effective 1 February 2026, expands the number of encouraged sectors to 1,679 entries, including 205 new entries and 303 revisions compared with the 2022 edition.
- The revised Catalogue reinforces China’s policy direction toward advanced manufacturing, clean energy technologies, digital infrastructure, and modern service industries.
- Foreign-invested projects included in the Catalogue may qualify for customs duty exemptions on imported equipment, preferential industrial land policies, and regional tax incentives.
- Additional incentives are available for investments located in central, western, and northeastern regions, as well as in the Hainan Free Trade Port, where eligible enterprises may benefit from a reduced corporate income tax rate of 15%.
- The Catalogue operates alongside China’s Foreign Investment Law and Foreign Investment Negative List, forming part of the country’s managed market-opening framework for international investors.
Policy Objectives and Strategic Direction
The revised Catalogue serves a dual function: guiding foreign capital toward sectors deemed critical for national development while steering investment geographically toward less developed regions. The policy instrument aligns with China’s broader economic transition goals—shifting toward high-value production, technological self-reliance, and sustainable growth models.
Compared to its predecessor, the 2025 edition expands the total number of entries to 1,679 across national and regional listings. This represents the addition of 205 new entries and modifications to 303 existing entries, reflecting recalibrated priorities in modern services, digital infrastructure, clean energy technologies, and advanced manufacturing capabilities.
Implications for International Investors
For overseas companies, particularly those with strengths in industrial automation, specialty chemicals, precision medical equipment, and high-technology R&D, the revised Catalogue presents concrete opportunities. The explicit inclusion of high-end medical imaging systems, diagnostic devices, and digital health technologies aligns with established competitive advantages in these markets.
Beyond direct financial incentives, inclusion in the Catalogue provides regulatory clarity and signals governmental support, potentially accelerating project approvals and improving operational predictability. Companies contemplating expansion into western regions or Hainan may find the combined effect of regional incentives and sector-specific benefits particularly compelling for long-term localization strategies.
Structural Composition
The Catalogue maintains its two-tier architecture:
National Listings: These apply uniformly across mainland China and encompass industries where foreign participation is considered strategically advantageous for economic upgrading.
Regional Listings: Tailored specifically for central and western provinces, northeastern regions, and Hainan Province, these entries account for local resource endowments, existing industrial bases, and developmental disparities. Projects qualifying under regional listings typically receive enhanced local incentives, including supplementary fiscal subsidies, streamlined administrative processing, and prioritized access to industrial parks.
Sector-Specific Developments
Manufacturing
The updated Catalogue places considerable emphasis on supply chain resilience and technological sophistication. Encouraged activities include high-end semiconductor fabrication equipment, precision robotics for automated production, advanced automotive components, and clean energy system parts. The chemical sector sees expanded coverage of high-performance polymers, specialty composite materials, green chemistry processes, and hydrogen fuel storage technologies. Pharmaceutical and medical device manufacturing receives targeted support for innovative biologics development, advanced diagnostic equipment production, and precision surgical instrument manufacturing.
Services
Modern service industries feature more prominently than in previous editions. The Catalogue now explicitly encourages research and development services, advanced logistics solutions, environmental consulting, e-commerce infrastructure development, and digital platform operations. Emerging areas such as industrial internet platforms, cross-border service outsourcing, and integrated manufacturing-service solutions receive fresh policy backing.
Consistently guide foreign investment towards advantageous industries in central, western and northeastern regions
The central, western and northeastern regions possess unique resource endowments and industrial strengths. The revised Catalogue substantially increases entries for central and western regions.
Examples include:
- Shanxi, Liaoning, Anhui, and Ningxia: smart terminal manufacturing, recycled polyester filament yarn production, display material manufacturing
- Inner Mongolia, Jiangxi, Guizhou, and Heilongjiang: clean coal technologies, agricultural processing, selenium-enriched agriculture
- Xizang, Xinjiang, Yunnan, and Qinghai: cross-border logistics, desert economy industries, eco-tourism development
Incentive Mechanisms
Enterprises investing in sectors included in the Catalogue may benefit from several policy mechanisms:
- Customs duty exemptions for eligible imported equipment used in encouraged projects.
- Industrial land policy support, including priority supply and reduced minimum transfer price thresholds.
- Preferential corporate income tax policies in specific regions including western provinces and Hainan Free Trade Port.
Alignment with National Planning
The Catalogue operationalizes objectives outlined in China’s 15th Five-Year Plan (2026–2030). While the Plan establishes macro-level targets for technological advancement, green transition, and regional rebalancing, the Catalogue translates these into actionable investment guidance. Priority areas mirror the Plan’s focus on artificial intelligence, quantum technologies, humanoid robotics, brain-computer interfaces, and sixth-generation telecommunications infrastructure.
Regulatory Context
The Catalogue operates within China’s broader “negative list plus encouraged catalogue” foreign investment management system.
Under this framework:
- The Foreign Investment Negative List defines sectors subject to foreign investment restrictions.
- The Encouraged Industries Catalogue identifies sectors where foreign investment is supported and may receive policy incentives.
Frequently Asked Questions About China’s 2025 Foreign Investment Catalogue
What is China’s Catalogue of Encouraged Industries for Foreign Investment?
China’s Catalogue of Encouraged Industries for Foreign Investment is a policy document jointly issued by the National Development and Reform Commission (NDRC) and the Ministry of Commerce (MOFCOM). It identifies sectors where foreign investment is actively encouraged and where projects may qualify for preferential policies such as tax incentives, customs duty exemptions on imported equipment, and preferential land-use arrangements.
When did the 2025 Catalogue take effect?
The 2025 edition of the Catalogue took effect on 1 February 2026, replacing the 2022 version. The updated catalogue expands the list of encouraged sectors to 1,679 entries, including 205 newly added items and 303 revisions.
What incentives are available for foreign investment projects included in the Catalogue?
Foreign-invested projects included in the Catalogue may benefit from several policy mechanisms, including:
- customs duty exemptions on imported equipment used for approved projects
- preferential land-use policies for encouraged industrial projects
- regional tax incentives, including a 15% corporate income tax rate for certain projects in western regions and the Hainan Free Trade Port
How does the Encouraged Catalogue relate to China’s Foreign Investment Negative List?
China regulates foreign investment through a “negative list plus encouraged catalogue” framework. The Foreign Investment Negative List identifies sectors where foreign investment is restricted or prohibited, while the Encouraged Industries Catalogue identifies sectors where foreign investment is actively promoted and eligible for policy incentives.
Strategic Considerations
Organizations evaluating China market entry or expansion should assess:
- alignment with encouraged industry categories
- eligibility for tax, customs, and land policy incentives
- regional investment positioning
- reinvestment and expansion strategies
Early evaluation of these policy parameters can support more accurate investment feasibility assessment and integration of regulatory considerations into project planning.
Organizations evaluating market entry or expansion in China may wish to assess how their operations align with the 2025 Encouraged Industries Catalogue and related regional incentive frameworks. If you would like to discuss how these policy developments may affect your investment strategy, please contact our team for further advice.