The top concern of American businesses for 2026 is not President Donald Trump’s trade war but the economic slowdown in China, according to a survey.
The top concern of American businesses for 2026 is not President Donald Trump’s erratic approach to trade but the economic slowdown in China, according to a survey conducted by the American Chamber of Commerce in China.
Even though China reported a record trade surplus of $1.19 trillion in 2025, the broader economy remained troubled. Several key indicators
have performed poorly: factory output, retail sales, and fixed‑asset investment have all declined recently, and factory deflation has now entered its 39th consecutive month.
China is expected to grow at 4.9 per cent in 2025, narrowly missing the modest target of 5 per cent, according to a Reuters poll of economists.
The same poll found that China’s growth is further expected to slow to 4.5 per cent in 2026 and maintain that pace in 2027.
Of the 368 companies surveyed, 64 per cent cited
slowing growth in China as their top concern. By contrast, 58 per cent identified US‑China trade tensions as a key challenge.
Why American businesses fear China’s slow growth
China is a huge market of 1.4 billion people and any slowdown —which could further reduce demand that’s already poor— is potentially damaging for companies that rely on Chinese consumers as an important market for their goods and services.
And, in bad news for businesses counting on continued growth in consumer spending, Chinese consumer demand fell to its lowest level since 2009 in 2025.
For much of the year, consumer confidence hovered near historic lows. This was accompanied by a struggling real estate market and stagnant household incomes. The combined effect has been a significant drop in spending. And that is bad news for American exporters.
Factory deflation, which refers to the fall in prices for domestically produced goods,
entered its 39th consecutive month in December 2025. This suggests that domestic demand remains extremely weak and that the economy is expanding without any real heat, meaning that even when factories produce more, they earn less due to persistent demand weakness and structural overcapacity.
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