US companies remain deeply integrated in the Chinese market and view their operations there as essential to global success, even amid a fragile trade truce and persistent policy frictions, according to the US-China Business Council's latest member survey.

The council's 2026 Member Survey, drawing on responses from 175 companies, finds that 95 percent of respondents consider their China operations somewhat to very important for staying competitive globally.

"For US companies, China is not optional," the report states. "A generation of sophisticated, pressure-tested Chinese companies is going global. These competitors are advantaged by factors unique to China, including scale, local innovation networks, and speed to market."

READ MORE: Survey: China critical for US businesses

Sourabh Gupta, senior fellow at the Institute for China-America Studies, described this as "a continuing case of China's indispensability to globally-minded companies".

"China is transitioning from being a mere global production partner to becoming a production and innovation partner for global businesses," Gupta told China Daily, noting China's "unmatched economies of scale, its dominance in the production of intermediate goods, and its burgeoning creative capabilities".

The survey also showed that tariffs and export controls continue to weigh heavily. Seventy-two percent of companies reported being affected by tariffs, up from the previous year, with 42 percent passing some costs to downstream customers. The report says that tariffs "continue to raise costs, boost inflation, and depress sales, exports, and profits".

"Export controls and retaliations always reduce sales and benefit competitors, so they are unattractive to businesspeople," Jack Midgley, principal consultant at Midgley & Company and adjunct associate professor in the Security Studies Program at Georgetown University, told China Daily.

Nearly half of respondents are impacted by US export controls, with 61 percent losing sales to Chinese competitors and 47 percent to international ones.

Gupta recommended that both sides draw "hard security lines — be it regarding critical infrastructure, software control, sensitive data, or dual-use items — should be narrowly and rigorously drawn". He added that overly expansive US measures were "anything but narrowly drawn".

Despite these challenges, business performance has shown resilience. Ninety-two percent of companies reported profitable operations in China in fiscal year 2025, up 10 percentage points from the prior year. Many use these profits to fund global expansion (53 percent), support US jobs (33 percent), and finance US-based R&D (32 percent).

"Regardless of swings in short-term profitability for China-based firms, the two economies are now linked through complex global supply chains. These supply chains will be resilient and self-correcting unless policymakers disrupt them with poor policy," Midgley said.

Gupta observed that US companies were "finding it may be hard to operate in China but finding it harder still to leave China, and the latter will also create competitive risk".

For future steps, Gupta called for honoring existing agreements. "The most practical steps … (are) to conform and honor the terms of their consensus in Busan … and extend the terms of their Busan arrangement for the entirety of the (Donald) Trump term."

Midgley echoed the need for dialogue: "Predictability and confidence come from transparency and deep engagement. Summit-level meetings can help shape the policy agenda, but the real confidence-building measures take place in dialogue among commercial leaders, investors, and innovators who will gain confidence by reaching mutual understanding."

Contact the writers at yifanxu@chinadailyusa.com