U.S. firms say confidence in China has hit an all-time low

American companies in China are experiencing historically low business confidence and poor profits amid U.S.-China tensions and a slowing Chinese economy. 

In an annual report released Thursday, the American Chamber of Commerce in Shanghai found that out of the 306 of its member companies surveyed, only 66% were profitable in 2023, the lowest level on record. 

The survey also showed that key confidence metrics were at their poorest ever point. Only 47% of respondents reported optimism about their five-year business outlook in China, while a record high of 25% cut investment in the country last year. 

China's slowing economy was listed as the top reason for members' decreased investment. Meanwhile, the strained relationship between Washington and Beijing as well as geopolitical tensions were seen as the biggest challenges to both their business operations and the Chinese economy at large.

"Increasing geopolitical pressures, particularly in the run-up to the U.S. election amid escalating trade tensions, and China's economic slowdown are leading firms to ramp up risk management and adjust their investment strategies," the chamber said in a statement.

The report comes amid a number of signs that the world's second-largest economy is losing luster amongst Western businesses.

While geopolitical tensions, tough regulations and censorship have long been risk factors for these firms, the country's struggling economy has increasingly emerged as a major concern.

According to a member survey released by the U.S.-China Business Council, China's macroeconomic woes ranked as the second highest concern among American companies this summer, behind only U.S.-China relations.

Similar to the AmCham Shanghai survey, the council found that more