Source: Global Times
[Global Times reporter Ni Hao] The Australian think tank, the Lowy Institute, released a report on the 2nd stating that the cooling of Sino-Japanese diplomatic relations has overshadowed the逆势 climb in Japan's economic ties with China. According to data from the Chinese Ministry of Commerce, Japanese direct investment in China surged by 55.5% year-on-year in the first three quarters of 2025, becoming an important source of significant growth in investments in the first three quarters. The report stated that Japanese capital is flowing back to China, showing a completely different trend from the bilateral political relationship.
The report said that not only has Japanese investment in China increased, but data for the entire year of 2025 also shows that Swiss investment in China rose by 66.8%, British investment grew by 15.9%, and UAE investment increased by 27.3%. This is mainly due to these countries' interest in green energy and the digital economy. The Lowy Institute stated that as the "14th Five-Year Plan" period comes to an end, Beijing is implementing a "targeted opening-up": the manufacturing sector is fully open, while foreign investment is selectively guided into fields such as artificial intelligence, electric vehicles, and digital services, thus attracting a large amount of overseas capital influx.
The report refuted the claim of "foreign capital leaving China." Data from the Ministry of Commerce showed that in 2025, the number of newly established foreign-funded enterprises in China reached 70,392, an increase of 19.1% year-on-year. The report also stated that large Japanese companies are increasingly adopting a strategy of "establishing themselves in China and serving China." The operating model of Japanese companies in China is also being reshaped, shifting from previously purchasing semi-finished products in China for export to now more directly integrating into the Chinese supply chain—this shift has already enabled many companies to achieve structural integration with the Chinese economy.
More intriguingly, the rise of the "third-country channel" is notable. Global offshore financial centers such as the UK and Switzerland have become indirect gateways for Western capital and technology to enter China. The report stated that Japanese companies are continuously deepening their connections with China through joint funds and partnership arrangements set up in Saudi Arabia, Switzerland, or the UK. It is expected that in 2026, more Japanese companies seeking to avoid geopolitical risks will invest in China through subsidiaries or joint ventures located in third countries. The think tank believes that this investment method may become a new paradigm for the world to connect with the Chinese economy.
"For a long time, China has been a hot spot for foreign enterprises to invest and develop. Investing in China means investing in the future," Zhou Mi, a researcher at the Institute of Commerce and Trade of the Ministry of Commerce, told the Global Times reporter on the 2nd. The continuous attraction of foreign investment in China stems from multiple factors, including policy openness dividends, the advantage of a super-large market, an improved industrial chain and supply chain system, and the creation of a market-oriented, rule-of-law-based, and internationalized business environment, as well as meeting the global capital's demand for high-end industries and green economy."
Original: toutiao.com/article/7612789882288751131/
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