A new U.S.-China trade truce has reignited confidence among American firms, with business sentiment in China rising 27% in January 2026. The improvement follows high-level diplomatic engagement between President Donald Trump and Chinese leader Xi Jinping.
- U.S. corporate optimism index for China rose 27% to 58.4 in January 2026
- Trade truce covers $120 billion in tariffs across tech, auto, and agriculture
- 63% of surveyed U.S. firms plan increased operations in China over next year
- Apple, Intel, and Microsoft are restarting supply chain expansions in Guangzhou and Suzhou
- MSCI China Index gained 9.4% in January; FDI inflows hit $21.3 billion
- Credit default swap spreads for Chinese corporates dropped 1.7 percentage points
American multinational corporations have shown a marked rebound in confidence toward the Chinese market, according to a survey of 150 major U.S. firms conducted by a financial services research group. The index measuring optimism about China investments climbed to 58.4 in January 2026—up from 46.1 in December 2025—marking the largest monthly gain since 2021. This shift follows a bilateral agreement announced in late December between U.S. President Donald Trump and Chinese President Xi Jinping, which included mutual tariff reductions on $120 billion worth of goods across technology, automotive, and agricultural sectors. The trade truce has directly influenced corporate decision-making: 63% of surveyed companies reported plans to increase operational capacity in China over the next 12 months, compared to just 39% in the prior quarter. Notably, tech firms such as Apple Inc. (AAPL), Intel Corp. (INTC), and Microsoft Corporation (MSFT) are accelerating supply chain adjustments to re-establish manufacturing nodes in Guangzhou and Suzhou, citing improved predictability in regulatory and trade environments. Market indicators reflect this renewed confidence. The MSCI China Index rose 9.4% in January, outperforming both the S&P 500 and Euro Stoxx 50. Analysts note that the stability provided by the new framework has reduced risk premiums, leading to a 1.7 percentage point decline in credit default swap spreads for A-rated Chinese corporates. Foreign direct investment inflows into China totaled $21.3 billion in January—up 34% from December—and were led by U.S.-based industrial and consumer electronics firms. The turnaround is particularly significant given the previous year’s volatility, during which over 40% of U.S. multinationals delayed or paused China expansion projects. With the current trajectory, economists project a 14% increase in U.S. exports to China by mid-2026 if the truce holds.