US firms in China most pessimistic since 1999, survey says | Business and Economy News

Recent findings from the American Chamber of Commerce (AmCham) in Shanghai paint a stark picture of the current sentiment among U.S. firms operating in China. According to a survey released on September 10, 2025, only 41% of U.S. businesses expressed optimism about their five-year business outlook in China, marking the lowest level of confidence recorded since the survey’s inception in 1999. This drop from 47% in 2024 reflects ongoing concerns about geopolitical tensions, specifically the increasingly fraught U.S.-China relations, which continue to overshadow the operating environment for American companies in China.

### Declining Optimism and Record Low Expectations

The survey reported that just 45% of the respondents anticipated revenue growth in 2025, which would represent a historic low for U.S. firms in the country. Additionally, only 12% of U.S. companies ranked China as their top investment destination, underscoring a significant shift in priorities as companies reassess their strategies amid these uncertainties.

The findings highlight a major ongoing concern: the impact of U.S.-China trade tensions. Nearly half of those surveyed called for the elimination of all U.S. tariffs on Chinese goods, while 42% advocated for the removal of Chinese tariffs on U.S. products. This sentiment illustrates a pervasive desire among American companies for a more conducive trade environment that could facilitate smoother operations and foster growth.

### Profitability Amid Adverse Conditions

Despite the grim outlook, there are positive notes in the survey results. Over 70% of respondents reported profitability for the year 2024, an improvement from the lowest level of 66% in 2023. Furthermore, nearly half of the businesses indicated a perception of increased transparency in China’s regulatory environment, representing a 13-point rise from the previous year.

The AmCham Shanghai chair, Jeffrey Lehman, noted that while government efforts to enhance the regulatory landscape had been acknowledged by businesses, these efforts were overshadowed by the looming U.S.-China trade tensions. He urged both governments to establish a stable and transparent framework that nurtures cross-border trade and investment.

### Broader Economic Challenges

Alongside these developments in the business community, China’s economy is grappling with significant challenges, triggered by a combination of external pressures and internal dynamics. The recent report from China’s National Bureau of Statistics indicated that consumer prices fell in August at the fastest rate observed in six months, signaling weak demand in one of the world’s largest economies.

Carsten Holz, an economist at Hong Kong University of Science and Technology, echoed concerns that the decoupling of the U.S. and Chinese economies is already underway, a sentiment reflected in similar findings from the European Chamber of Commerce in China, which reported record lows in optimism among European firms as well. The tension appears to align with China’s policy direction toward self-sufficiency across various economic sectors, further complicating the operating environment for foreign businesses.

### Impact on Future Investment Strategies

Given the current climate, businesses may be considering re-evaluating their investment strategies in China. The reluctance to commit to long-term projects may stem from the uncertain policy landscape and heightened geopolitical risks. Companies are likely weighing the costs of maintaining operations in China against potential opportunities in other markets.

Furthermore, as firms navigate these complexities, they may increasingly seek diversification in their operations, local partnerships, and innovative solutions to mitigate risks associated with trade tensions and regulatory unpredictability.

### Conclusion

The AmCham Shanghai survey results offer critical insights into the evolving landscape for U.S. firms operating in China. With optimism at its lowest since 1999, businesses are left grappling with the implications of strained bilateral relations and domestic economic challenges. While profitability remains within reach for many, the broader anxiety surrounding investment viability and future growth poses tough questions for American companies looking to maintain a foothold in one of the world’s most dynamic markets. With continued calls for a stable and transparent cross-border trade environment, it remains to be seen how the U.S. and Chinese governments will respond to the needs of businesses caught in the crosshairs of geopolitical strife. Addressing these concerns will be crucial in shaping the future of U.S. investment in China and could dictate the trajectory of economic relations between the two powers moving forward.

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