2 hrs ago
US Firms Regain China Confidence as Domestic Competition Intensifies
A group that represents American companies in Shanghai asked businesses how they feel about working in China.
More companies now feel hopeful about their future there than they did last year.
This change happened as the United States and China tried to reduce trade tensions.
Companies also reported stronger profits.
However, many American businesses said Chinese companies are becoming tougher competitors.
Some companies plan to invest more money in China next year.
Businesses said China’s rules seemed more transparent than before.
At the same time, many headquarters still limit some research and development work in China.
The share of US companies optimistic about their five-year China outlook rose to 58%, up 17 percentage points from a year earlier.
US-China tensions fell from the top business concern, while 68% of respondents cited competition from Chinese companies among their main challenges.
About 78% of surveyed companies said their China operations were profitable last year, the highest share recorded since 2019.
Investment sentiment improved, with 28% increasing China investment in 2025 and 31% planning increases in 2026.
The June survey covered 262 companies and found improving views of regulatory transparency, alongside continued limits on China-based research and development.
- Who
- The American Chamber of Commerce in Shanghai surveyed 262 US companies operating in China.
- What
- The survey found rising business confidence, stronger profitability and investment interest, but increasing concern about Chinese competition.
- Where
- China, among US companies with operations there.
- When
- The survey was conducted in June; the report was released on Thursday and includes investment plans for 2025 and 2026.
- Why
- Confidence improved as US-China trade tensions eased, while competition from Chinese companies became a larger concern.
Improved Business Outlook
Continuing Business Caution
Trade relations
Improved Business Outlook
The easing of US-China tensions and high-level engagement helped create a more positive mood among American companies.
Continuing Business Caution
More than half of respondents still listed US-China tensions among their top three business challenges.
Market competition
Improved Business Outlook
Improved confidence, profitability and planned investment suggest companies continue to see opportunities in China.
Continuing Business Caution
Competition from Chinese companies was the leading concern, with businesses citing Chinese gains in speed, product development and quality.
Regulation and technology
Improved Business Outlook
More than half of respondents viewed China’s regulatory environment as transparent, the first time that measure exceeded 50% since 2020.
Continuing Business Caution
Only 39% expected further regulatory opening, and 46% said their headquarters restricted China-based research and development activities.
Key facts
- Five-year outlook
- 58% of respondents were optimistic, up 17 percentage points from the previous year.
- Top business concern
- 68% cited domestic Chinese competition among their top three challenges.
- US-China tensions
- 53% cited bilateral tensions among their top three concerns, down 13 percentage points.
- Profitability
- 78% said their China operations were profitable last year.
- Investment in 2025
- 28% said they increased investment in China.
- Investment plans for 2026
- 31% planned to increase investment, while 14% expected to reduce it.
- Regulatory transparency
- 55% considered China’s regulatory environment transparent, up seven percentage points.
Quotes
Jeffrey Lehman
Chairman of the American Chamber of Commerce in Shanghai
“There has been a mood shift among our members”
firstpost.com
Sources
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