Is China Still Profitable for Foreign Companies? 78% of US Firms Say Yes — Here's the Data

On September 10, 2026, AmCham Shanghai released its annual China Business Report 2026, based on responses from 262 member companies operating across China. The headline number is notable: 78% of respondents reported being profitable in China in 2025, up 7 percentage points year on year and the highest share since 2019.

For foreign executives considering market entry—or reviewing an existing China strategy—the data deserves a closer look. It is a useful signal from AmCham Shanghai members, not a forecast that every foreign company entering China has the same probability of success.

The Four Numbers That Matter

Indicator	2025 result	Year-on-year change	What it indicates
Profitable respondents	78%	+7 pp	Highest share since 2019
Optimistic about the five-year outlook	58%	+17 pp	Reversal after four years of record lows
Increased investment in China	28%	—	Highest share in four years
Said the business environment is transparent	55%	+7 pp	Improved reported transparency

At the same time, only 16% of respondents were pessimistic about their five-year outlook in China, the lowest share since 2021.

Why Did Confidence Rebound?

Reporting on the survey points to three connected factors: stronger financial performance, a more stable geopolitical outlook and progress in the regulatory environment.

Financial results varied by sector. Manufacturing led, with 85% of respondents reporting profits in 2025. Services remained the lowest-performing broad sector at 69%, but improved by 14 percentage points year on year.

The strategic challenge also shifted. Local competition was cited by 68% of respondents, overtaking China-US tensions at 53% as the leading operating concern for the first time since 2022. The message is not that risk has disappeared; it is that competing effectively in the local market has become even more important.

The AI Adoption Gap

43% of respondents said their Chinese competitors were more advanced in AI adoption. This measures perceived adoption rather than basic research or model capability, but the operational implication is still clear: foreign entrants should expect local competitors to move quickly from tools and pilots into products, workflows and customer service.

What the Survey Means for China Market Entry

The report offers an encouraging but qualified picture:

• Profitability has rebounded, while competition remains intense. A differentiated product, defensible technology, distribution access and local execution still matter.
• “In China, for the world” became the most common reported operating model. It was selected by 29% of respondents, compared with 24% focused primarily on “In China, for China.”
• China Plus One is a resilience strategy, not proof that China can be replaced. Southeast and South Asian locations may diversify supply chains, while China’s industrial ecosystem can remain central to production, innovation or sales.

For a practical entry sequence—from entity choice and licensing to tax, banking and the first 90 days—see our Doing Business in China guide.

The Hainan Angle

For foreign companies considering the Hainan Free Trade Port, the survey should be read alongside the actual conditions of Hainan’s policies:

• Qualifying encouraged-industry enterprises with substantive operations may access the 15% corporate income tax framework; registration alone does not qualify a company.
• Eligible high-end and urgently needed talent may benefit from the 15% individual income tax cap, subject to the current talent and residence rules.
• Island-wide special customs operations began on December 18, 2025. Zero-tariff treatment remains conditional on the entity, goods and transaction route.
• Hainan’s cross-border data negative list can reduce uncertainty for qualifying activities, but it does not remove national data, cybersecurity or sector rules.

These measures can strengthen a viable operating model. They do not turn a weak product or an unsuitable structure into a profitable business.

The Bottom Line

The 2026 AmCham Shanghai survey is a meaningful snapshot of companies with operating experience and capital at stake. Its strongest signal is the combination of improving profitability and tougher local competition: 78% of respondents reported profits in 2025, while 68% identified domestic competition as their leading challenge.

That is a reason to test China entry with evidence—not a reason to assume success. Validate customer demand, map licences and market access, model the full cost base, and choose a location only after the operating case works.

Sources

• AmCham Shanghai: 2026 China Business Report launch, September 10, 2026
• Global Times: Sharp rebound in business confidence among US companies in China, September 10, 2026
• China Daily: US firms display new confidence in China, September 12, 2026
• Yicai: US firms’ confidence in China rises as profits recover, September 10, 2026

Liebang (Hainan) Technology Co., Ltd. helps foreign companies assess, establish and operate in the Hainan Free Trade Port. For a tailored market-entry assessment, contact contact@hainansetup.com.