U.S. Companies are Doubling Down on China

According to China's Ministry of Commerce, U.S. actual investment in China grew by 24.5% year‑on‑year in the first four months of 2026, and by 17.3% for the January-May period.

Against a backdrop of headwinds in global cross‑border investment, persistent tariff measures, and ongoing geopolitical shifts, U.S. investment in China continued to grow—a sign that, after weighing factors such as market scale, supply chain efficiency, and innovation ecosystem, many U.S. companies continue to view China as a major global destination for cross‑border investment.

Policy Framework: Greater Clarity for Foreign Investors

Over the past year, China has rolled out a series of policy measures aimed at stabilizing foreign investment:

On February 1, 2026, the 2025 Edition of the Catalogue of Encouraged Industries for Foreign Investment took effect, adding a net 205 encouraged categories, with a focus on R&D and design services, advanced manufacturing, and green technology services. Eligible companies can benefit from tariff exemptions on imported self‑use equipment and a reduced corporate income tax rate of 15% for enterprises located in the central/western regions and Hainan Free Trade Port.

On June 22, 2026, the Ministry of Commerce, the National Development and Reform Commission, and the Ministry of Finance jointly issued the Action Plan for Stabilizing and Enhancing the Use of Foreign Capital, introducing 15 specific measures across five areas, including broadening market access, improving investment facilitation, and strengthening service support systems.

On market access, the Action Plan builds on pilot openings initiated in 2024 in biotechnology, value‑added telecommunications, and wholly foreign‑owned hospitals, and further promotes pilot programs in modern service sectors such as digital economy and healthcare. In financial services, the Plan supports foreign institutions in using risk management instruments including treasury bond futures, and in carrying out fund investment advisory services. In pharmaceuticals, it proposes studying the implementation of segmented drug production rules.

The Plan also addresses post‑access operational barriers that foreign companies have long cited. It calls for full implementation of fair competition review in government procurement and tendering, ensuring national treatment for foreign‑invested enterprises, and introduces systematic arrangements on cross‑border data flow management and support policies for foreign‑funded R&D centers. Some of these opening measures build upon and institutionalize the pilot programs initiated in 2024.

Together, these policies which range from easier market entry to operational facilitation and fiscal/tax incentives, form a more complete institutional framework for foreign‑invested enterprises, offering multinational companies clearer and more predictable policy expectations.

U.S. Companies' Strategic Commitment to China

A range of survey data confirms that U.S. companies continue to prioritize the Chinese market as a key pillar of their global strategy.

According to the USCBC (U.S.-China Business Council)'s 2026 Member Survey, 95% of respondents consider China to be somewhat to very important for staying globally competitive. Slightly more than half of USCBC member companies continue to rank China among their top three global investment destinations.

Similarly, AmCham China's 2026 China Business Climate Survey Report finds that 83% of respondents highlight the importance of positive bilateral relations to their operations in China, and approximately 79% hold a positive or neutral outlook for U.S.-China relations in 2026. Reflecting the importance of the Chinese market, 57% said they intend to increase investment in China, and 39% reported China's investment environment has improved. Meanwhile, 70% feel either more welcome in China or have seen no change compared to the previous year, and 74% believe foreign-invested companies are treated no worse than domestic competitors in their respective sectors. Respondents also view domestic consumption growth and sustained economic and market reforms as important development opportunities in the Chinese market.

This aligns with what we have observed among U.S. companies we serve at CCA-IM—the majority have undertaken varying degrees of investment and expansion in China over the past two years, reinforcing the survey findings.

While challenges persist—with 72% of USCBC respondents reporting tariff impacts and around 40% reporting negative effects from U.S. export control policies—the broader trajectory points to sustained U.S. corporate commitment.

New Growth Vectors: Advanced Manufacturing and R&D/Design Services

Based on our ongoing tracking of U.S. investment activity in China, growth is concentrated in two main areas:

Advanced manufacturing capacity expansion. According to survey findings from AmCham South China and USCBC, U.S. companies continue to deepen their supply chain presence in semiconductors, new energy, and consumer electronics. While the January--May data did not break down investment by sector, Ministry of Commerce data for January--April shows that advanced manufacturing, new energy, biopharmaceuticals, and premium consumer goods were among the primary investment targets during that period.

R&D and design services. Industry research shows that growing R&D investment by U.S. firms in China has created domestic demand for services such as industrial software customization, localized AI algorithm deployment, and high-end lab operations management.

Several recent developments illustrate this trend. In the healthcare sector, Boston Scientific launched its first global open innovation hub—the A3 Center—in Shanghai in May 2026, focusing on cardiovascular, oncology, and neuromodulation solutions, and established partnerships with a local hospital and the Shanghai Institute of Physical Intelligence and Robotics to further deepen its R&D presence in China. In the AI infrastructure space, F5 Inc, a US-based company has upgraded its China strategy from "Innovate in China, Serve China" to "Innovate in China, Connect the World," leveraging its China operations as a global innovation hub. On the supply chain front, Honeywell brought together nearly 100 local supply chain partners at the 2026 China International Supply Chain Expo, while cooperation between U.S. aerospace companies and their Chinese counterparts continues to expand, with qualified Chinese aviation parts suppliers well positioned to take on subcontracting orders.

Supporting these trends is China's position as the only country with all industrial categories in the UN classification—41 major sectors, 207 intermediate sectors, and 666 sub‑sectors—which provides a unique combination of shorter lead times, lower overall costs, and more stable supply chain integration. These strengths, combined with a consumer market of over 400 million middle‑income individuals, offer U.S. companies an attractive environment for innovation and commercialization.

Commitment Amid Uncertainty

For U.S. companies already on the ground, the current policy environment is systematically addressing long‑standing barriers to entry and operations. From the expansion of pilot programs in services and improvements in cross‑border data flow to safeguards on national treatment in government procurement and specialized IP protection mechanisms, a more stable and predictable institutional environment is taking shape. The policy incentives in advanced manufacturing and R&D/services warrant continued monitoring and assessment.

At the same time, tariff trajectories, export control policies, and the overall tone of bilateral relations remain critical variables for investment decisions. Several key milestones in the second half of 2026 merit attention: the expiration of Section 301 tariff exclusions in July, the release of findings from the Section 122 investigation into Permanent Normal Trade Relations (PNTR) status in August, and the scheduled expiry of the U.S. suspension of additional reciprocal tariffs in November—a one‑year measure initially put in place in November 2025.

For U.S. companies, strategic positioning in China is no longer simply a market choice, but a long-term structural commitment—one that reflects a clear-eyed assessment of risk and reward, and a conviction that the Chinese market remains integral to global competitiveness.

About CCA-IM

CCA-IM has supported more than 300 North American companies and over 40 private equity firms in more than 500 projects across a wide range of industries — from market assessment and strategy development to full project execution in China and across Asia.

Our local presence and hands-on project management capability allow us to bridge the gap between strategic intent and operational reality. Whether you are evaluating new investment opportunities, navigating regulatory changes, or optimizing existing operations, we are here to help. To learn more, please visit our website: www.cca-im.com.

Contact Jayson Cronin at jcronin@cca-im.com to discuss your China investment or market strategy.