Survey: decoupling chills investment appetite

A 2025 survey of U.S. companies in China found investment plans fell to a record low as tariffs and broader decoupling fears climbed. (uschina.org) The U.S.-China Business Council said only 48% of respondents planned to invest in China in 2025, down from 80% in 2024. The group surveyed members between March and May 2025 and released the results on July 16, 2025. (uschina.org) U.S.-China relations ranked as the top business challenge, and tariffs rose to second from eighth a year earlier. Nearly 70% of companies said tariffs hit them directly, and 88% said the bilateral relationship affected their business. (weforum.org) The survey also showed a split between near-term caution and long-term dependence. More than 80% of respondents said they invest in China to serve the domestic market, and the council said nearly all reported they could not stay globally competitive without their China operations. (uschina.org) That caution sits inside a wider pullback in foreign capital. The U.S. State Department’s 2025 China investment climate statement, citing China’s Ministry of Commerce, said inbound foreign direct investment fell 27.1% in 2024 to $114.8 billion. (state.gov) The same State Department report said China ranked 17th most restrictive out of 104 economies in the Organisation for Economic Co-operation and Development’s 2024 foreign direct investment restrictiveness index. It also said companies cited weak growth, capital controls, and policy unpredictability as reasons for lower confidence. (state.gov) Decoupling here means governments and companies are reducing how much they rely on China for supply chains, technology, capital, or market access. Carnegie researchers wrote in January 2025 that U.S.-aligned countries are moving toward less technological integration with China, but not in the same way or at the same speed. (carnegieendowment.org) India shows the other side of that reallocation debate. India’s stock market reached about 4% of global market capitalization in early 2024, according to a Motilal Oswal note cited by Business Today, though its weight in a global equity index was only 1.7% in a Morgan Stanley investment paper. (businesstoday.in) (morganstanley.com) Those two numbers measure different things: one tracks India’s share of the world’s listed equity value, while the other tracks its weight inside a specific benchmark index. The distinction helps explain why investors can talk about India as a growing “opportunity set” even when benchmark allocations still look small. (morganstanley.com) (businesstoday.in) For U.S. firms in China, the immediate picture is narrower: fewer new checks, more tariff risk, and continued reliance on a market many still say they cannot ignore. (uschina.org)