China’s recent expansion of visa-free entry for travelers from 38 countries—including major European nations, Malaysia, and Thailand—has sparked a surge in business and leisure visits. In the first half of 2025, inbound tourism jumped 42% year-on-year, with Shanghai, Beijing, and Guangzhou seeing the biggest influx.

But beyond boosting hotel bookings and luxury sales, can this tourism rebound translate into stronger foreign business confidence in China?

1. The Visa-Free Policy: What’s Changed?

Key Updates (2024-2025)

✔ 15-day visa-free entry expanded to France, Germany, Italy, Spain, the Netherlands, and Malaysia (previously only ASEAN nations).

✔ Business visa fast-tracking for executives from Fortune 500 firms.

✔ Transit visa exemptions extended to 72 hoursin major hubs like Shanghai and Chengdu.

Early Results

● 5.8 million visa-free entries recorded in Q1 2025 (up 58% vs. 2024).

● German business delegations to China rose 31% after the policy took effect.

● Luxury retail rebound: LVMH and Richemont report double-digit growth in China sales, driven by returning tourists.

Verdict: The policy is working for short-term visits—but will it convince foreign firms to reinvest long-term?

2. Tourism vs. Business Confidence: The Disconnect

While tourists are returning, foreign direct investment (FDI) growth remains sluggish:

📉 FDI into China fell 7% YoY in Q1 2025 (Ministry of Commerce data).

📉 European Chamber survey: 62% of firms say “regulatory unpredictability” remains a bigger concern than travel access.

Why Tourism Alone Isn’t Enough?

● Businesses care more about market access, IP protection, and regulatory stability than visa policies.

● Geopolitical tensions (US tech bans, EU anti-subsidy probes) still overshadow China’s reopening.

● Local competition is fiercer than ever—foreign firms no longer get automatic advantages.

Verdict: Visa-free travel helps rebuild goodwill, but policy reforms and fair competition matter more for FDI.

3. Who Benefits Most from the Visa-Free Boom?

Winners:

✅ Luxury & Hospitality (Four Seasons, LVMH, Marriott) – High-spending tourists are back.

✅ MICE Industry (Conventions, exhibitions) – Events like Canton Fair see record foreign attendance.

✅ Consulting & Market Research Firms– More foreign execs are visiting to assess opportunities.

Challenges:

❌ Manufacturers & Industrial Firms – Still face “Buy China” procurement policies despite easier travel.

❌ Tech & R&D Companies – US-China tensions limit collaboration, regardless of visa rules.

4. Will This Lead to an FDI Rebound?

Positive Signs

● “Look-see trips” increasing: More foreign CEOs visiting to explore JVs or expansions.

● South Korea & Germany lead reinvestments: Auto and chemical firms are expanding China R&D centers.

Remaining Hurdles

● Profit repatriation rules still discourage long-term capital commitment.

● Data and cybersecurity laws complicate digital businesses.

Visa-free access helps rebuild bridges, but structural reforms are needed for sustained FDI growth.