More intriguing, however, may be the rise of “third-country channels”.
Countries like the United Kingdom and Switzerland, both global offshore financial hubs, are emerging as indirect gateways for China to access Western capital and technology. Saudi Arabia, driven by its energy transition agenda, has also begun channelling capital into Chinese technology and new-energy sectors.
We are already seeing US companies investing in China’s pharmaceutical industry via Saudi Arabia. It is likely that by 2026, more Japanese firms, seeking to hedge against geopolitical risk, will invest in China through subsidiaries or joint ventures based in third countries. What matters here is not where the capital originates, but how it is legally and statistically classified.
As of 2025, China and Switzerland are negotiating an upgrade to their FTA, which officials say could expand cooperation into digital trade and AI. Given China’s strategy of channelling foreign investment into specific industries, Switzerland may evolve into a “technology custody centre” in 2026.
Foreign investors, such as those from Japan, may establish their Asian R&D headquarters under Swiss entities before forming joint ventures with Chinese partners, giving these investments the legal appearance of neutrality.
At the same time, China and the UK have restarted their economic and financial dialogue.
In January 2026, UK Prime Minister Keir Starmer visited Beijing and promoted closer economic ties, including agreements to expand cooperation in services trade and launch a feasibility study toward a potential bilateral services trade agreement. In theory, multinational firms could use London-based financial structures to facilitate investment cooperation with China. Depending on ownership and reporting arrangements, such structures may affect how investments are formally recorded, although this would vary case by case.
https://www.channelnewsasia.com/commentary/japan-china-tensions-political-fdi-foreign-direct-investment-5963646
