The reasons vary by sector and industry, but include US companies applying lessons learned in China to other markets, gaining insight into future competitors and funding global expansion through profits earned in the country.
For 95 per cent of US business respondents in the US-China Business Council Member Survey 2026, China operations are somewhat to very important for staying competitive globally.
The trade deficit with China may have narrowed, but it has not reinvigorated US manufacturing.
US export controls are not calibrated to empower American firms.
China’s business environment for foreign companies is not improving.
Tariffs continue to raise costs, boost inflation and depress sales, exports and profits. Despite the detente, the number of companies affected by tariffs (72 per cent) has risen over the last year, and the proportion of companies losing sales due to US and Chinese tariffs has spiked.
Companies are only able to absorb some of these costs internally, and 42 per cent are passing some costs downstream. The trade deficit with China may have narrowed, but it has not reinvigorated US manufacturing, according to the suirvey.
US export controls are not calibrated to empower American companies. While intended to restrict access to critical technologies and inputs, export controls are less effective when Chinese or foreign competitors can readily backfill.
Survey data showed a growing share of companies reporting lost sales, which is raising alarm bells about US competitiveness. At the same time, China’s expanding export controls and counter-sanctions regime are compounding these pressures.
American companies need signs that they are still welcome in China. China’s business environment for foreign companies is not improving, the survey revealed.
China’s support for domestic companies, including through industrial policy and preferential treatment in government procurement, is eroding the gains from formal market access openings. Just half of companies surveyed plan to invest in China this year.
Fibre2Fashion News Desk (DS)
