US companies are showing renewed optimism about their future in China, with a recent survey revealing significant plans for reinvestment. According to the American Chamber of Commerce in South China (AmCham South China), 73% of US firms reported a positive or very positive return on investment in China for 2024.
The survey, which included 316 companies, found that 76% plan to reinvest in China in 2025. Of these, a substantial 77% are setting aside under $10 million each. Notably, 6% of the companies have allocated over $250 million for reinvestment in the coming year.
In total, member companies have earmarked $14.59 billion from profits in China to reinvest over the next three to five years, marking a surge of over 33% compared to previous figures. This move underscores the growing confidence US businesses have in China’s market potential.
Major US brands are deepening their connections with the Chinese market. Electric vehicle manufacturer Tesla, led by Elon Musk, has significantly invested in China. The company’s Gigafactory in Shanghai boasts a localization rate exceeding 95%. Despite a slight dip in global deliveries last year, Tesla’s sales on the Chinese mainland hit a record high of 657,000 units, an 8.8% increase year-on-year. Tesla has also been included in multiple local government procurement catalogs, highlighting China’s equal treatment of domestic and foreign enterprises.
Another American giant, ExxonMobil, secured access to a $1 billion LNG receiving terminal that began operations last September in Huizhou, Guangdong Province, under a 20-year agreement. This move further signifies the commitment of US firms to the Chinese market.
The survey’s findings come amid trade tensions and unilateral tariffs imposed by the US government on key trading partners, including China. However, many businesses, economists, and industry associations have expressed that these tariffs may increase costs for American consumers and are not beneficial in the long term.
Dr. Harley Seyedin, chairman and president of AmCham South China, emphasized the importance of the Chinese market for US companies. “Since nearly 75% of American companies in China are primarily focused on importing components from the US to produce goods and services in China for China, they believe that continued reinvestment in China is essential for their long-term success,” he said.
“Businesses are increasing their commitments in China to secure a stronger foothold in this critical market. The reinvestment surge signals confidence in China’s future and their hope for increased US-China cooperation,” Dr. Seyedin added.
