Beijing's Security Focus Dampens US Firms' Optimism in China: AmCham

American enterprises operating within China have acknowledged certain advancements in the country's regulatory landscape and a perceived increase in 'openness.' However, these positive observations are tempered by persistent concerns regarding market access and Beijing's escalating emphasis on national security, which continues to dampen optimism among US firms. The upcoming visit of US President Donald Trump to China is also met with muted expectations.

The American Chamber of Commerce in China (AmCham China) highlighted several areas of progress in its 2026 white paper. These include targeted regulatory refinements in specific sectors, ongoing updates to foreign investment policies, measures to improve market access, and incremental progress in clarifying cross-border data governance. Yet, these developments are overshadowed by widespread apprehension concerning the ambiguity surrounding national security-related regulations.

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While the Chinese market continues to offer opportunities, our members have observed trends in policy, regulation and public discourse that may signal a more restrictive environment for foreign participation in certain sectors.

Foreign companies find compliance increasingly complex due to broad and evolving definitions of data security, coupled with national security reviews. Other recurring grievances cited in the report include 'uneven' market access, a disconnect between national policy intentions and local enforcement, and structural pressures stemming from industrial policies, overcapacity, and the growing impact of non-tariff barriers such as export controls on rare earths and delays in licensing.

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A growing emphasis on national and economic security has, in some cases, come at the expense of open markets and fair competition … restrictions on foreign participation could, over time, constrain innovation and market dynamism.

Adding to these concerns is a palpable unease about China's decelerating economic growth, a sentiment notably absent in previous years. AmCham China chairman James Zimmerman stated that while the Chinese market still presents opportunities, trends in policy, regulation, and public discourse suggest a potentially more restrictive environment for foreign participation in certain sectors. He warned that an increased focus on national and economic security has, at times, come at the expense of open markets and fair competition, potentially constraining innovation and market dynamism.

From the perspective of South China Morning Post, which often provides a nuanced view of China's economic and political landscape, this report underscores the delicate balancing act foreign businesses must perform. While acknowledging progress, the underlying message is one of caution. The emphasis on security, while understandable from Beijing's viewpoint, creates significant hurdles for foreign investors accustomed to a more predictable and open market. This dynamic is crucial for understanding the future of foreign investment in China, a topic of intense interest both domestically and internationally.

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It’s important to see this document not as a list of complaints but also a reflection of progress … the glass is half full