Shanghai, China – A record share of U.S. businesses are diverting or planning to divert investments out of China, according to a new survey released Monday by teh American Chamber of Commerce in Shanghai (AmCham Shanghai). The annual China Business Climate Survey reveals that 24% of companies have shifted or are considering shifting investments to choice locations,marking a significant increase from 19% in 2023.
This shift comes despite reported improvements in China’s regulatory environment and ongoing efforts by Beijing to attract foreign capital. While nearly half (48%) of businesses now perceive the regulatory landscape as clear - a jump from 35% in 2024 – concerns remain, particularly within the technology sector. The trend underscores growing geopolitical tensions and evolving global supply chains,possibly impacting China’s economic growth and foreign investment inflows.
The survey, conducted in January, polled 381 member companies.It found a notable improvement in perceptions of regulatory clarity, with the share of businesses citing a lack of transparency as hindering operations falling by 12 percentage points to 16%. Additionally, 37% of respondents indicated that foreign and local companies are treated equally, a 5 percentage point increase.beijing has recently intensified it’s efforts to woo foreign investment, unveiling an “action plan” earlier this year aimed at easing investment in sectors like biotechnology and clarifying government procurement standards. However, the AmCham Shanghai data reveals that 14% of respondents still report a worsening business environment in China, with the tech industry experiencing the most significant challenges, cited by 31% of respondents in that sector.
