China remains a magnet for foreign investors seeking its huge internal market, especially after the country's economic boom over the past decade.

After China joined the World Trade Organization (WTO) in 2001, its reform and opening-up became a passive move under the WTO rules, said Li Xiaogang, director of the Foreign Investment Research Center at the Shanghai Academy of Social Sciences.

Since then, China has made perfecting its regulatory mechanism a top priority, with foreign investors benefiting from the country's globalization. Over the next decade, foreign investors will be affected by China's economic structural reform, he said.

China, the world's second-largest economy, is in the transition to rebalance its export-reliant, investment-led economy toward a consumption-driven one.

For foreign investors, China is gradually losing its cost advantages in terms of favorable taxes, cheap land and low costs for damaging the environment, compared with 10 years ago.

"China has the strength to make its internal market more appealing and it will remain a magnet for foreign investment," Li said.

Today, the majority of foreign companies in China are here for the local market, compared with the labor-intensive and export-oriented foreign direct investment a decade ago.

The companies also see significant increases in revenue and profit in China. A survey by the European Union Chamber of Commerce in China showed 78 percent of responding European companies reported a marked revenue increase in 2010, compared with 50 percent in 2009.

About 59 percent said they were planning major new investments in the country in the next two years, up 11 percent from last year.

The companies' optimism comes partly from their confidence in China's 12th Five-Year Plan (2011-2015) which will stimulate the business environment, opening opportunities for high-tech and green products and technologies, and in the service industries, said Davide Cucino, the chamber's president.

Analysts also say the development of emerging industries will spark a new round of foreign investment, be a new engine for economic growth and attract more capital inflows.