The Kaipher Editorial Team 
US Business Confidence in China Hits a 25-Year Low
American business confidence in China has officially hit rock bottom. A new survey from the American Chamber of Commerce in Shanghai reveals that optimism has plunged to its lowest point in a quarter-century, with only 41% of U.S. companies feeling positive about their five-year outlook. This sharp drop from last year’s 47% marks the weakest sentiment since the chamber started tracking it in 1999, signaling that escalating tensions and economic headwinds are forcing a fundamental rethink of corporate strategy in the world’s second-largest economy.
The survey, which polled 254 member companies, was conducted right after President Donald Trump unveiled his sweeping “Liberation Day” tariffs, sparking a tit-for-tat trade war. Despite a brief 90-day truce, the damage was done. A staggering 66% of businesses now point to geopolitical friction as the single biggest challenge they face over the next five years. “We appreciate this 90-day pause, but the underlying issue persists, making future planning challenging for companies,” explained Eric Zheng, president of AmCham Shanghai, who hopes both governments can find a path to an agreement soon.
This deep uncertainty is causing companies to vote with their wallets. An unprecedented 47% of businesses are now redirecting investments originally meant for China to other countries—the highest figure ever recorded. The top beneficiary of this shift is Southeast Asia, with the Indian subcontinent also emerging as a popular alternative. In another historic low, only 12% of American firms now consider China their number one investment destination, as concerns over a slowing economy and intense competition from local Chinese rivals grow louder.
Despite the bleak long-term outlook, there are a few glimmers of good news in the short term. The number of companies turning a profit actually rose to 71%, up from a historic low of 66% last year. Similarly, 57% of firms saw their revenues grow year-over-year, an improvement from 50% in the previous period.
However, that positive trend isn’t expected to last. Only 45% of companies anticipate their revenue will grow in 2025, a figure that would set a new record low if it holds true. The vast majority—64%—are convinced that the new tariffs will directly hurt their bottom line this year.
In one surprising bright spot, nearly half of the businesses (48%) now find China’s regulatory environment to be transparent, a significant 13-point jump from last year. Confidence that the country will become even more open also doubled to 41%.
This survey aligns with official data showing that U.S. foreign direct investment in China dropped by 14% to $163 billion last year. Yet, even with all the challenges, walking away isn’t an option for everyone. Nearly a third of companies (28%) admit that they simply cannot be competitive on a global scale without a strong presence in the Chinese market, leaving them caught between a rock and a hard place.
