Improved financial performance and easing China-U.S. tensions have lifted confidence among United States businesses in China to its highest level after 2021, according to the 2026 China Business Report by the American Chamber of Commerce in Shanghai. The share of respondents who are optimistic about their five-year business outlook in China rose by 17 percentage points to 58%, reversing a four-year decline that had pushed the reading to successive record lows. In contrast, 16% of respondents are pessimistic about their five-year business outlook in China, the lowest level since 2021. The report suggested that the improvement in business confidence has coincided with the easing of China-U.S. trade tensions. However, U.S. companies keep a close eye on the market environment and bilateral relations.
This year’s survey followed several months of positive developments in China-U.S. relations. According to the report, these developments signal a move toward a more predictable and constructive bilateral relationship anchored in strategic stability. “Business confidence has made a critical comeback, supported by stronger financial performance and an improved geopolitical landscape,” Jeffrey Lehman, Chair, and Eric Zheng, President, of AmCham Shanghai, said in a joint message.
According to Lehman and Zheng, optimism about the five-year business outlook in China and the proportion of members reporting profitability last year both reached record levels. Furthermore, a growing percentage of respondents expect their top-line growth to improve this year and outpace their companies’ global performance in the near term. Meanwhile, “investment sentiment has recovered, with nearly one-third of respondents planning to increase investment this year”, the message added. Profitability among the surveyed companies reached its strongest level since 2019, as 78% of respondents were profitable in 2025, up 7 percentage points from the previous year.
Performance continued to vary significantly by sector. Manufacturing remained the strongest-performing sector, with 85% of respondents reporting profits in 2025, a 5 percentage point increase from the previous year. Services recorded the lowest rate among sectors at 69%, but showed a significant year-on-year improvement, rising 14 percentage points.
China is home to 84,000 U.S.-invested companies, with a combined annual revenue of nearly USD700 billion, highlighting the strong complementarity and mutual benefits underpinning bilateral economic ties. “China is a training ground for U.S. companies to maintain their global competitiveness,” Lehman and Zheng from AmCham Shanghai said in their joint message. Chinese competitors raise the bar even higher. In the artificial intelligence sector, 43% of members view their local competitors as more advanced in AI adoption, the message added, as reported by the China Daily.
The report highlights the following bullet points:
• Profitability rebounded to a post-pandemic peak, with nearly four in five respondents (78%) profitable in 2025, a seven-percentage-point increase from the previous year and the highest rate since 2019.
• Business confidence bounced back markedly after four years of record lows.
• A majority (55%) said that the business environment in China is transparent, up 7 pp.
• Investment confidence in China improved with 28% of respondents increasing investment last year, the highest level in four years. The share redirecting planned China investments elsewhere fell to 39%, the lowest in several years. Southeast Asia remained the top destination for those rerouting investments, chosen by 48%, though the inclination to relocate investment to the U.S. grew (29%, up 11 pp).
• For the first time since 2022, domestic competition (68%, up 5 pp) was the top challenge for members’ China operations, surpassing U.S.-China tensions (53%, down 13 pp).
• Three-quarters of members indicated that being in China benefits their U.S. operations in some way, with one-third emphasizing that their China presence enhances the global competitiveness of their U.S. operations.
• “In China for the world,” including the U.S., was the top business strategy this year (29%), overtaking “in China for China” (24%). The share serving global markets excluding the U.S. jumped to 22%, double that of two years ago.
• Members are betting on China-based innovation but with boundaries. Half of members with China-based R&D plan to increase spending.
