American companies in China are scaling back new investment plans due to low profitability and uncertainty over U.S.-China relations, tariffs, and export controls. The U.S.-China Business Council survey found that over half of companies have no new investment plans in China this year, a record high. Export control measures are negatively impacting companies, with concerns over future profitability and business relocation outside of China increasing.

Meanwhile, Silicon Valley chipmaker Nvidia received approval to resume sales of AI chips to China, but their most powerful chips remain under U.S. export control. Despite concerns over deflation, policy uncertainty, and tariffs, most U.S. companies reported profits in 2024. However, a record number of American businesses plan to relocate operations outside of China, reflecting a lack of optimism about the future.

Concerns about China’s regulatory environment and market access did not rank among the top five concerns for American companies this year. Nearly all American companies believe they cannot remain globally competitive without their Chinese operations. European companies are also cutting costs and scaling back investment plans in China due to a slowing economy and intense competition driving down prices.

Read more at Yahoo Finance: Daunted by geopolitics and trade war, US companies in China report record-low new investment plans