ISLAMABAD, Oct 20 (ABC): Foreign investment in China’s high-tech industries has surged, highlighting a shift in international investor priorities towards research, advanced manufacturing and innovation-driven production, as multinational companies increasingly seek opportunities in technology-intensive sectors.
According to the latest data from China’s Ministry of Commerce (MOFCOM), foreign investment actually utilised in high-tech industries rose 35.1% year-on-year to RMB200.26 billion during January-August 2026, even as overall foreign direct investment (FDI) declined 5.3% to RMB479.95 billion during the same period.
High-tech industries accounted for 41.7% of total utilised foreign investment, up 12.4 percentage points from a year earlier.
The increase was particularly strong in research and development (R&D). Foreign investment in R&D and design services jumped 74%, while investment in services supporting the commercialisation of scientific and technological achievements increased 64.2%. FDI in electronic and telecommunications equipment manufacturing also rose 41.9%.
These figures highlight China’s growing attractiveness as a centre for technological innovation and higher-value production. They also reflect a changing investment pattern in which research capabilities, advanced manufacturing and technological development are becoming increasingly important to multinational investors.
The shift carries implications for international industrial cooperation, particularly for developing economies seeking greater participation in advanced manufacturing and global technology supply chains.
Asad Rehman, Policy Analyst at S&P Global, told Wealth Pakistan that China’s innovation-driven growth offered important lessons for Pakistan, which needed to move its industrial cooperation strategy towards technology transfer, research partnerships and higher-value manufacturing.
He said Pakistan should align its industrial development priorities more closely with China’s technological strengths. It should also pursue joint ventures that improve productivity, develop local industrial capabilities and strengthen export competitiveness.
“Pakistan has to distinguish between attracting Chinese capital and attracting Chinese technology. The next objective should not merely be the establishment of more Chinese-owned factories; it should be to bring investment that creates local supplier networks, transfers production capabilities, trains engineers and technicians, and gradually integrates Pakistani firms into higher-value regional supply chains,” he said.
Foreign-funded research centres strengthen China’s innovation ecosystem
China’s Ministry of Commerce said earlier this year that foreign-funded R&D centres were becoming an increasingly important part of the country’s innovation system.
Multinational companies have been shifting some of their operations in China from production bases towards innovation hubs serving wider markets.
Around 14,000 new foreign-invested enterprises were established in scientific research and technical services during 2025, representing a year-on-year increase of 27.2%.
The expansion of foreign-funded research activities highlights China’s growing role not only as a major manufacturing centre but also as a destination for technological development, product innovation and the commercialisation of scientific research.
For developing economies, this trend demonstrates the importance of attracting investment that combines capital with technological expertise, skilled employment, research collaboration and access to international supply chains.
Rehman said the second phase of the China-Pakistan Economic Corridor (CPEC 2.0) provided an established platform for expanding such cooperation.
He noted that the bilateral economic agenda increasingly emphasised industrialisation, innovation and business-to-business partnerships.
Pakistan, he said, should adopt a targeted approach by identifying sectors where China’s technological strengths align with its existing industrial base and export potential.
“Pakistan should identify the sectors where Chinese capabilities match Pakistan’s existing industrial base and export potential. Electric vehicles and components, batteries and energy-storage systems, electronics, solar and renewable-energy equipment, agricultural technology, pharmaceuticals and selected engineering industries could offer realistic entry points,” he said.
However, Rehman cautioned that attracting technology-intensive investment would require Pakistan to address persistent investment bottlenecks, strengthen industrial competitiveness and improve its business environment.
Pakistan urged to strengthen research and industrial linkages
Muhammad Kamran, Scientific Officer at the Pakistan Council of Scientific and Industrial Research (PCSIR), said China’s rapid expansion in high-tech industries was strengthening its position in global technological development and creating opportunities for international cooperation.
Talking to Wealth Pakistan, he said China’s progress in advanced manufacturing, green technologies and innovation-intensive industries offered considerable potential for bilateral industrial and technological partnerships.
However, Pakistan’s ability to benefit from these developments would depend largely on strengthening domestic industrial capabilities and preparing local enterprises to participate in more sophisticated manufacturing activities.
Kamran said Pakistan had a growing pool of information technology professionals and an extensive network of universities and research institutions. However, these resources had yet to be effectively integrated into industrial development.
He stressed the need for closer cooperation among universities, research organisations and manufacturing enterprises to develop the technical expertise required by advanced industries.
Kamran also emphasised the importance of creating conditions that encourage Chinese and other international manufacturers to make long-term production commitments in Pakistan.
He said predictable regulations, reliable electricity supplies, efficient transportation networks and stronger investor safeguards were essential for attracting technology-driven industries.
The changing composition of foreign investment in China shows how technological capabilities, research infrastructure and advanced manufacturing ecosystems are gaining importance in international investment decisions.
For Pakistan, experts believe CPEC 2.0 offers an opportunity to develop technology-based industrial partnerships while improving the domestic conditions needed to support them.
Kamran said Pakistan would need to connect its scientific and technical resources more effectively with industrial production and create a stable investment environment to translate opportunities arising from China’s high-tech expansion into sustainable industrial growth.
