Despite the piling up of trade barriers, export restrictions and geopolitical tensions that constantly threaten to disrupt the US-China relationship, one thing remains constant: the Chinese market is and remains a key part of the strategy of many US technology companies. Not because it is easy. On the contrary, it is difficult, risky and unpredictable. But that is precisely why it offers a competitive advantage that cannot be replicated elsewhere.
The new normal: acting despite uncertainty
For many technology companies, a presence in China is no longer a choice, but a necessity. In a US-China Business Council survey of 130 US companies in 2025, a staggering 82% of respondents said their China operations were profitable in 2024. What’s more – 82% of these companies have more than 20 years of presence in the Chinese market.
This experience pays off, but does not mean comfort. Over the past years, trade tariffs have strongly raised operating costs. In 2025, they have become the second most frequently cited concern by companies in China, just after ‘the general unpredictability of US-China relations’.
Despite this, companies are not withdrawing from the Middle Kingdom. Why?
China’s middle class as a test of technological maturity
The most repeated reason is access to China’s emerging middle class – affluent, mobile, digital and very demanding. For US manufacturers of software, consumer electronics or cloud solutions, it is the world’s most valuable testing ground. If a product is accepted in China, it has a good chance of global success.
This market is not forgiving of underperformance. Consumers expect fast, intuitive, scalable solutions – and they have access to local alternatives that are often cheaper and just as good. US-based companies therefore need to keep raising the bar – both in terms of UX and cost efficiency. The Chinese customer is a benchmark for global technology ambitions.
R&D, scale, pace – what a presence in China really delivers
Beyond consumers, China offers something else: a unique environment for rapid product scaling and iteration. Its ecosystem of suppliers, speed of innovation adoption and proximity to advanced industrial infrastructure means that companies can test and develop new technologies faster than in any other country.
This can be seen in the semiconductor sector, where US companies – despite export restrictions – are still trying to maintain relationships with local partners. Similarly, in the area of robotics, consumer electronics or AI-based services – many of these solutions are developed with the Chinese user in mind and are only later adapted to Western markets.
In practice, this means that China acts as a technology laboratory. A company that abandons this space loses not only a market, but also access to knowledge, data and scaling models that are difficult to replicate elsewhere.
Risk as an operating cost
All this is happening in the shadow of growing political risk. In 2025, as many as 75% of respondents to a US-China Business Council survey cited rising input costs as the biggest operational challenge. Despite this, only 39% of companies are actively reorienting their supply chains – the rest are operating as before because the alternative is either unavailable or too costly.
Technology companies are therefore learning to operate with risk as a cost element. Instead of a complete retreat from China, they are implementing hybrid approaches: a local presence in China, while building up security buffers in other Asian countries (e.g. Vietnam, Malaysia, India) or Mexico. Few choose to fully evacuate – too much can be lost.
Surviving the global game
The most important conclusion of the study? A presence in China remains strategically ‘non-negotiable’. And it is not just about temporary gains, but about the long-term ability of companies to maintain their position in the global market. Companies that are able to operate in the face of Chinese competition and consumer demands are better prepared to face challenges in other regions.
This is why – despite all the difficulties – the Chinese market continues to attract US technology players. It not only gives them access to a huge market, but also to a dynamic that no other economy offers.
China remains a space full of contradictions for technology companies: a source of profit and risk, innovation and uncertainty. But also a place without which it is difficult to speak of global scale.
As long as China’s economy sets the pace for technology and digital consumption, US companies will have to find a way to participate – regardless of political tensions.
