Foreign direct investment shows no signs of slowing results
Highlighting that the country has become a key hub for business model experimentation and technological innovation, they said China will remain a priority market for future foreign investment, particularly in areas such as electrification, digital transformation, green development and trade-in services, as many of such companies actively expand their presence abroad.
According to a report on foreign firms released by the Beijing-based Chinese Academy of International Trade and Economic Cooperation in mid-June, these enterprises continue to increase their investment in China's high-tech manufacturing sector this year.
The strategic layout of future cutting-edge industries by foreign businesses in China not only brings capital and technology, but also promotes China's industrial leap through industrial chain reshaping, international resource coordination and localised innovation, according to the report.
One such company is French industrial conglomerate Schneider Electric. The group, backed by its China AI (artificial intelligence) innovation labs, has been actively promoting the integration of AI technologies with application scenarios across industries such as manufacturing, building, infrastructure and data centres, aiming to accelerate digital transformation and the shift towards low-carbon growth.
Yin Zheng, executive vice-president, China and East Asia operations at Schneider Electric, said that as a key driver of global economic growth, China boasts a vast market and a solid industrial foundation.
The development of new quality productive forces is speeding up the creation of innovation-driven digital and green productivity, offering broader development opportunities for multinational corporations in the field of high-tech sectors, said Yin.
'For the next step, we will continue to build digital, green and global ecosystems to empower small and medium-sized enterprises to innovate and help Chinese companies expand into international markets,' he added.
Similar views were shared by Nathan Stoner, chairman for China at Cummins Inc, a United States-based engine manufacturer.
'We are currently undergoing adjustments and transformations in our business, not just in components, but also in our operations in China. Our goal is not only to serve the Chinese market, but also to support Chinese automakers in their global expansion,' said Stoner.
For instance, some Chinese automakers are expanding in Southeast Asia, Europe and other regions, and Cummins is keen to assist them in developing their overseas business, he added.
Cummins will launch next-generation products, including electric motors, electronic controls, e-drive systems and integrated controllers — as well as power electronics — in the country next year.
The actual use of foreign direct investment (FDI) in China's high-tech industries reached 109.04 billion yuan (£11.09 billion) in the first five months of 2025, with FDI rising 146 per cent in the e-commerce services sector, 74.9 per cent in the aerospace equipment manufacturing sector and 59.2 per cent in the chemical pharmaceuticals manufacturing sector, year-on-year, said the Ministry of Commerce.
Investment from the United Kingdom, the Republic of Korea and Germany increased 60.9 per cent, 10.3 per cent and 7.1 per cent, year-on-year, respectively, during the five-month period.
In a shift from industrial investment to people-to-people exchanges, Air New Zealand, Air China and Tourism New Zealand announced a partnership in late June aimed at strengthening travel from China to the island country.
Air New Zealand will invest more than $700,000 (£510,000) in marketing through this partnership in China over the next 12 months.
'This is an opportunity to further stimulate travel demand to encourage growth in inbound tourism from China to New Zealand,' said Greg Foran, CEO of the Auckland-based airline, adding that the carrier expects to see a 33 per cent increase on a yearly basis in premium seats on the Shanghai-Auckland route from October.
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A faded billboard near the Tower of London declares that a disused site behind high walls is set to become a 'new mixed use campus' with 'office, retail and leisure space'. That was the old plan for Royal Mint Court, where the coinage of the Realm was minted in buildings of 19th century grandeur for over 150 years until 1967. The new plan is for the People's Republic of China to transform this venerable location, beside the gleaming high rises of the City and directly opposite the Tower of London, into a gigantic new embassy. A final decision on whether to allow China to proceed will be taken by Angela Rayner, the Housing Secretary and Deputy Prime Minister, before Sept 9. Just how big China's new embassy would be is disclosed by the original planning application, rejected by Tower Hamlets Borough Council in 2022, but 'called-in' by Rayner for a definitive verdict. Royal Mint Court spans 5.2 acres and its fine Georgian buildings and their modern additions boast an internal area exceeding 563,000 sq ft (52,300 sq m) - approaching twice the floorspace of Westminster Abbey. If it goes ahead, China's new embassy would have a bigger site and a larger floor area than America's, which is built on 4.9 acres of Battersea. Not only would China's new mission be the biggest in London, it would be the largest of its kind anywhere in Europe: it would even have 30 per cent more floorspace than the Chinese embassy in Washington. There is simply no precedent for a diplomatic project of this scale on British soil. Plenty of concerns have been raised about the implications for national security but perhaps no-one has a better understanding of the potential dangers than people who are already bitterly familiar with the long reach of China. 'When I first heard of that I was really frightened to be honest,' says Chloe Cheung, a 20-year-old pro-democracy activist from Hong Kong. 'It's a really huge space in central London. Why would they need that?' Cheung left Hong Kong and moved to Britain with her family in 2020 after Beijing imposed a draconian National Security law on the territory. This bid to crush the pro-democracy movement caused over 150,000 of Hong Kong's people to seek refuge in Britain. Now some wonder whether they will always be safe. On Christmas Eve last year, Hong Kong's police published an arrest warrant accusing Cheung of 'incitement to secession' and 'collusion with a foreign country', and offering a bounty of HK$1 million (£95,000) for 'information on this wanted person'. That was not because of anything Cheung had done in Hong Kong: she was only 14 when she left. Instead she was targeted for having dared campaign for democracy in her old home while living in Britain and working here for the Committee for Freedom in Hong Kong. 'It's because of what I did in this country: it's only because of that that I was given a bounty,' she explains. Cheung was subjected to the arrest warrant and bounty under Hong Kong's National Security law, which punishes anything the authorities might define as 'subversion' with life imprisonment. Most chillingly of all, Articles 37 and 38 say this law 'shall apply' to anyone living anywhere in the world, setting no limits on who might become a target of the Chinese authorities. Cheung fears this could help explain China's ambition to build a colossal new embassy in London. 'The location is not about us but the size is more about us,' she says. 'They want to have more space and more people to intimidate us, to do trans-national repression.' Her fears have been supported by Parliament's human rights committee, which on Aug 1 named China as a 'flagrant' perpetrator of 'trans-national repression', targeting Hong Kong's pro-democracy campaigners and other supposed opponents for threats, harassment and intimidation on British soil. While the latest version of the Diplomatic List names 139 Chinese diplomats based in London, the new embassy would include 225 residential flats, suggesting that China wants to increase its staffing by up to 60 per cent. Cheung is deeply disturbed by that possibility. 'They could have a huge surveillance office inside Royal Mint Court and the British cannot do anything because it will be their sovereignty, their embassy,' she says. 'And it's not just about giving them space: it's about giving them face. Giving them the biggest embassy in London is like saying 'you are the most important country'.' Already Cheung must vary her route every day and 'look over my shoulder before I get home to check no-one is following me'. Once, she says she was tailed through London by two men of Chinese appearance, who followed her into a restaurant where they simply stared at her, before disappearing into a nearby hotel. Every time she writes an article or speaks in public, she is inundated with 'sexual harassment and threatening messages' online. 'It has affected my mental health,' says Cheung. 'I have to be really cautious about meeting people.' 'The reality is that the Chinese are going to pursue you wherever you are. When I was placed on the bounty list they said they would chase us to the end of the world.' She adds: 'We thought that it was going to be safe if you move here, but if you are vocal against the Hong Kong or Chinese authorities, you are constantly being harassed. When people think the UK is a safe haven for activists, it's not necessarily the case for us from Hong Kong.' As for the new embassy, Cheung says it would 'make me feel a lot more endangered than right now…. it would imply that the British Government are less and less willing to stand up for our safety'. Last month, Yvette Cooper, the Home Secretary, and David Lammy, the Foreign Secretary, jointly condemned the National Security law, saying: 'This Government will continue to stand with the people of Hong Kong, including those who have made the UK their home. We take the protection of their rights, freedoms and safety very seriously, and will not tolerate any attempts by foreign Governments to coerce, intimidate, harass, or harm their critics overseas.' But words like these are of limited reassurance to George* (not his real name), a 22-year-old student from Hong Kong studying at a British university. Having attended some campus demonstrations in favour of democracy in Hong Kong, he now feels compelled to hide his real identity from the Telegraph. 'We still think that the UK has free speech and the UK government and police won't allow the Chinese government to exercise trans-national repression over us,' he says. 'So far I feel safe to live here.' But if the new embassy is constructed, George says: 'That would definitely change the way that we feel. The Royal Mint is a huge place so there may be a danger that the Chinese can bring their agents inside.' He warns of a chilling effect on anyone campaigning for democracy. 'Every Hong Konger in the UK may be free in body, but their minds are still in fear of the Chinese government. If the embassy is built, that may make this fear become bigger and bigger.' And George is struck by the internal contradiction in the British Government's position. 'You can't in one press release say the Chinese government is harming democracy and freedom in the UK and then, in the next press release, say we're allowing them to build a big new embassy,' he says. In January, Cooper and Lammy publicly supported the new embassy on two conditions. China would have to relinquish the seven diplomatic premises it already has in London and consolidate everything in the new embassy. In addition, China would have to build a 'gated barrier or fence' to control public access to the forecourt of Royal Mint Court in order to reduce the risk of security incidents. This conditional backing showed that the Government was, in principle, content for the embassy plan to go ahead. Back in 2018, Boris Johnson, then Foreign Secretary, allowed China to buy the Royal Mint Court site for £255 million, a decision that began the project. But Royal Mint Court is next to the City of London, the biggest financial centre in Europe and the second most important in the world, representing the single most vital economic asset in the United Kingdom. The fibre-optic cables serving the City and transmitting countless transactions criss-cross the area around the proposed embassy: a secure BT telephone exchange is directly adjacent to the site. There is an irony in the fact that Angela Rayner is being asked to grant permission for this project not to a close ally but to a state described by Lammy in the House of Commons as a 'sophisticated and persistent threat'. But events this week suggest the British position may be changing. As Housing Secretary, Rayner has the final say and she has suddenly asked for further assurances. It turns out that plans for the new embassy submitted for her approval omit certain details for 'security reasons'. China aims to fill the imposing main building, completed in 1812, with reception rooms, offices and a banqueting hall. But a letter from Rayner's department - revealed by Luke de Pulford, the Director of the Inter-Parliamentary Alliance on China - states that the 'internal physical arrangements' in this plan have been 'greyed out' in the version she received. Plans for the basements of other buildings have also been concealed, along with the proposed layouts of the flats in the accommodation block. In total, Rayner's department has identified 52 redactions which appear to obscure key elements of what China proposes for all the main buildings on the embassy site. Redacting those details inevitably stirs suspicions that China intends to use secure underground facilities for espionage. Rayner has given the planning consultancy engaged by China's regime until August 20 to rectify these omissions. Her department's letter also discloses that China has not satisfied either of the conditions set by Lammy and Cooper. The plans do not include the new 'gated barrier or fence'. And Rayner has asked the Foreign Office for an 'update' on China's 'progress towards consolidation of accredited diplomatic premises', showing this has not been agreed. A Foreign Office spokesperson confirmed that the department would provide this update but declined any further comment. De Pulford describes the letter from Rayner's office as 'easily the most significant development' in the embassy saga, adding that it was possible that the British Government was 'looking for reasons to say no' and reject the scheme. However, the spokesperson of China's Embassy in London says the 'resubmitted planning application for the new Chinese Embassy project has taken into full consideration the UK's planning policy and guidance as well as views of all relevant parties.' The spokesperson adds: ' It is hoped that the UK side will consider and approve this planning application based on merits of the matter.' Step by step, China is steadily extending its influence in Britain, from providing the technology for renewable energy to investing in research with UK universities and preparing to export even greater numbers of electric vehicles. A grand new embassy would be a fitting symbol of how Beijing is steadily entrenching its position and advancing its interests. And part of China's plan, it seems, is to make it steadily harder for any British Government to provide people like Chloe Cheung with a safe refuge and the freedom to campaign for democracy in Hong Kong. Like its predecessors, the Government wants to build a beneficial relationship with Beijing while also upholding Britain's values - and this country's status as a place where even those who are abhorred by China's brutally authoritarian leaders can still be safe. But one day, the balancing act may become impossible and a choice will need to be made. If China is allowed to have the biggest embassy in London, a milestone may be passed. 'We have told them that our safety is at risk from this mega-embassy,' says Cheung. 'But if they still let it be built? If the UK government is walking backwards and the Chinese government is walking forwards?'
