The Pilot Free Trade Zone in China is one of the main elements of the country’s advanced opening up policy that influences international economic cooperation, the allocation of resources, and industrial growth, including construction. This research analyzes the panel data for 285 cities in China between 2000 and 2021, using the DID method to assess the impact of PFTZs on the flow of FDI to regions. The study demonstrates that PFTZs contribute significantly to the increase in FDI. This result is confirmed through PSM-DID robustness tests. Moreover, PFTZs contribute to infrastructure modernization and increasing demand for high-quality construction projects, which contributes to the attraction of foreign investments in the construction industry, including architecture, engineering, and urban planning. Furthermore, this research explores the heterogeneity of the policy impacts caused by the implementation of PFTZs and provides opportunities for foreign construction companies operating in China.
