Companies in southern China are feeling growing confidence in the state of US-China relations and are reinvesting cautiously in the country, according to a survey by a US business lobby group.
The American Chamber of Commerce in South China (AmCham South China) – a mix of foreign and domestic firms – generally expects bilateral ties to stabilise in the year ahead, but is also adapting to geopolitical friction as China shifts from assembling Western goods to supplying industrial parts to emerging markets, the report found.
A survey of more than 400 companies – conducted in late 2025 – found that 39 per cent of respondents expressed a positive outlook on the future of US-China relations, up 14 percentage points from 2024, the chamber said in the study released on Tuesday.
“Because of the continuing conversations between China and America, the future of US-China trade through 2026 will be characterised by a ‘tactical truce’ – slowing but not stopping economic decoupling – with bilateral trade increasingly focused on non-sensitive sectors,” said Harley Seyedin, chairman and president of AmCham South China, at a press conference the same day.
The finding came ahead of US President Donald Trump’s expected trip to China at the end of March, which will be the first such visit by an American leader in nine years if it goes ahead.
Of the 426 respondents to the AmCham South China survey, 32 per cent were from the United States, 28 per cent from mainland China, 12 per cent from Europe, 18 per cent from Hong Kong or Macau, with the remainder coming from several other regions.
The findings suggest that most firms expect US-China trade tensions to intensify in 2026, but they also believe the impact on their operations will not be as long-lasting as they had feared.
About 37 per cent of companies projected disruptions to their operations lasting more than three years, down 10 percentage points from the previous year. Meanwhile, the proportion of firms predicting disruptions lasting six months or less had risen to 19 per cent, up 10 points compared with 2024.
But Seyedin cautioned that even with this partial easing, “both countries are emphasising self-reliance, with bilateral trade projected to shrink to less than half of pre-2017 levels”.
The survey also highlights a geopolitical realignment of China’s supply chains. In 2025, China’s trade with countries participating in the Belt and Road Initiative (BRI) – Beijing’s global development strategy – reached US$3.39 trillion, accounting for 51.9 per cent of its total trade value.
“This majority share represents a critical structural hedge,” Seyedin said. “By prioritising these markets, China has partially insulated its export engine from Western decoupling pressures.”
He added that China’s role in the global supply chain was evolving. “China is transitioning from a final assembly point for the West to the core industrial engine supplying intermediate goods to Southeast Asia and the BRI nations,” he said.
On financial performance, most surveyed companies remained profitable in China in 2025, with 82 per cent reporting gains, down 3 percentage points year on year, according to the survey.
Eighty-seven per cent of American firms reported being profitable, down 2 percentage points from 2024, while companies from other countries saw a larger drop – down 5 points to 76 per cent.
Last year, 63 per cent of respondents reinvested in China, but capital deployment for reinvestment remained modest, with around 76 per cent directing less than US$10 million to their China operations, the study found.
The proportion of American companies reporting reinvestment plans for 2026 dropped by 7 percentage points year on year to 67 per cent. But firms from other nations reported a modest 2-point uptick to 75 per cent. -- SOUTH CHINA MORNING POST
