U.S. companies operating in China are showing a notable recovery in their business outlook, attributed to the U.S.-China trade truce and efforts to manage conflicts.
The American Chamber of Commerce in Shanghai reported on September 10 that 58% of responding companies are optimistic about their business prospects in China over the next five years, a 17 percentage point increase from last year. This marks a significant rebound in confidence among U.S. businesses in China, which had reached a record low during the four years following the COVID-19 pandemic.
Performance has also improved, with approximately 78% of companies reporting operating profits in China last year, the highest level since 2019. This increase in profitability is believed to have boosted companies' confidence in their operations in China.
Notably, the primary business risk perceived by U.S. companies in China has shifted. The survey found that 68% of respondents identified competition with local Chinese firms as a major challenge, up 5 percentage points from last year. In contrast, 53% cited deteriorating U.S.-China relations as a key issue, a decrease of 13 percentage points. For the first time since 2022, competition within China has emerged as a more significant business challenge than U.S.-China tensions.
Investment intentions have also improved, with 28% of companies reporting increased investments in China last year, the highest level in four years. Analysts suggest that uncertainties surrounding U.S. tariff policies toward China, as well as tariffs on other countries, have enhanced China's relative attractiveness for investment. Additionally, 39% of companies indicated they would redirect funds intended for investment in China to other markets, an 8 percentage point decrease from last year, marking the lowest level in recent years.
Jeffrey Lehman, chairman of the American Chamber of Commerce in Shanghai, stated, "The recent stabilization of U.S.-China relations has led to positive changes. Both countries should leverage the current atmosphere of dialogue to establish a stable and transparent institutional framework."
* This article has been translated by AI.
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