American businesses in China report highest optimism since 2021 as trade tensions ease
A survey by the American Chamber of Commerce in Shanghai found that 58% of US firms are optimistic about their five-year prospects in China, the highest level since 2021. Profitability also rebounded, with 78% of companies reporting profits last year. The improvement follows a trade truce between Washington and Beijing and increased high-level engagement.
The AmCham Shanghai survey reveals a sharp reversal of a four-year downward trend in business sentiment. Optimism about the next five years climbed 17 percentage points to 58%, while those expressing pessimism fell to just 16%, the lowest level since 2021. Profitability also reached a post-pandemic high, with 78% of firms reporting gains last year.
This improvement coincides with renewed diplomatic efforts, including President Trump's May visit to China and an anticipated trip by President Xi to the US. Chamber chair Jeffrey Lehman credited both domestic regulatory improvements and the stabilizing bilateral relationship, though underlying disputes over technology and security remain unresolved.
Improved business sentiment could encourage US firms to expand operations and hiring in China, potentially benefiting local suppliers and workers. Conversely, lingering disputes over technology and security may still prompt cautious behavior. The survey's positive trend might also signal a stabilizing global trade environment, though this optimism remains vulnerable to sudden political shifts. Policymakers on both sides could use this momentum to further de-escalate tensions, but sustained progress is not guaranteed.