Despite challenges U.S. enterprises still view China as a significant and important market

China and the U.S. offer mutually beneficial business opportunities. Despite negativity around doing business in China, American companies still view it as an important and significant market. But what’s required is an expert partner, such as Pamir Consulting, to help you navigate these challenges, mitigate risk exposure, and maximize opportunity. 

On March 4, 2025, President Trump added another 10% tariff on some Chinese imports, adding to a 10% tariff that came into effect on February 4. In response, China placed 15% tariffs on imports of U.S. goods. But contrary to popular opinion, and despite the rise in tariffs, there is no ‘mass exodus’ of American companies from China.

In fact, a recent report by the American Chamber of Commerce in China (AmCham) – titled ‘2025 China Business Climate Survey Report’ and published earlier this year^[1] – shows that U.S.-China relations remain critical, with 87% of respondents emphasizing the importance of constructive bilateral ties to the operations of American companies in China (in the Technology and R&D sectors that figure rose to 95%).

China remains a key investment destination for U.S. companies

The survey, which was conducted from October 21 to November 15, 2024, reflects the opinions of 368 respondents at enterprises of various sizes and verticals, including many with global operations. Responses show that China remains a key investment destination for U.S companies, with nearly half still ranking it among their top three global priorities. However, fewer companies now view China as their primary destination – 21% no longer listed it as a preferred investment destination.

The survey also found that, in 2024, 30% of American companies considered relocating, or already are relocating, manufacturing and sourcing away from China. Conversely, the report notes that the majority of U.S. companies – just over two-thirds, or 67% – were not considering relocating manufacturing, a 10% drop from 2023.

Of those that were, 40% named the Indian subcontinent and Southeast Asian countries – including Malaysia, Philippines, Singapore, Thailand, and Vietnam – as the most popular destinations for relocation. The main driver for redirecting planned investments away from China to these regions being new business opportunities. The survey also showed that 18% considered relocating to the U.S. in 2024, up from 16% in the prior year.

Business leaders of foreign companies operating in China have reported for the last few years about the challenges they face, including geopolitical tensions, confusing or unclear legislation and compliance requirements, economic slowdown, increasing competition, unequal treatment compared to local companies, difficulty finding the right employees, and theft of IP… the list goes on.

However, nearly one-third of the AmCham survey respondents felt that China’s enforcement of IP rights has improved during the 12 months before the survey, while a higher proportion of members (compared to 2023, although no figures were provided) reported improvements in government policies and regulations towards foreign companies, as well as greater transparency in the regulatory environment.

Profitability a concern but signs of optimism for 2025

Profitability (or lack of) has also been a concern for U.S companies in China – in the AmCham survey 46% reported they expected to be profitable or very profitable in 2024 (down 3% on 2023), while another 36% broke even, and 18% operated at a loss. It is one of the lowest figures in recent years. However, revenue expectations for American companies operating in China showed optimism, with 68% of members expecting it to grow in 2025.

China’s consumer markets and supply chains offer significant opportunities for American companies. In acknowledgement of this, Chinese Vice Premier He Lifeng told AmCham members at the annual appreciation dinner held in Beijing on February 28, 2025, that China welcomes enterprises from the U.S. so that both nations can “share development opportunities and contribute to the stable, healthy, and sustainable development of China-U.S. ties.” He added: “China welcomes U.S. companies to continue to invest in China.”

U.S.-China business ties represent a mutually beneficial relationship. American companies benefit from access to advanced manufacturing, skilled employees, and world-class R&D. However, there are also significant risks and barriers.

It means that you require a trusted partner such as Pamir Consulting to help you navigate the ecosystem, assess and evaluate partners, and manage your risk exposure while maximizing potential opportunities.

Pamir has decades of experience providing strategic consulting advice to American enterprises looking to make the most of their business opportunities and investments in China.

Our unique blend of quantitative and qualitative research and experience allows us to provide strategic mitigation services that eliminate negative impact and protect reputation. This comprehensive view of current and emergent risk covers the complete supply chain and stakeholder ecosystem.

If you’re looking at entering, or investing in, the Chinese market – or any other country in the Asia-Pacific region – contact us to find out more.

^[1] https://www.amchamchina.org/china-business-climate-survey-report/