Growing optimism leads Australian firms to further invest in China

Almost half of Australian companies plan to increase investment in China, reflecting growing confidence in the bilateral trade and investment relationship, according to a new report released by the China-Australia Chamber of Commerce (AustCham China).

The 2025 Doing Business in China Flash Report, which polled 730 Chinese and foreign companies active across the China-Australia business corridor, shows strengthening business confidence in the bilateral relationship amid global complexities.

"Confidence is holding firm and broadening — a sign that the stability we've seen in the bilateral relationship is translating into sustained business optimism," said Vaughn Barber, chair of AustCham China.

The report notes that the primary driver of this rising confidence is the stabilization of diplomatic relations between China and Australia, while US-China tariff tensions remain the leading negative factor. Nearly eight in 10 firms have responded by adapting or diversifying rather than scaling back — actively managing risks instead of retreating.

According to the report, nearly 80 percent of respondents report higher confidence in the Australia-China trade and investment relationship since February, with the increase strongest among Chinese-controlled firms.

"Over the next 12 months, most Australian firms plan to maintain or slightly increase their investment in China, and looking two to three years ahead, the outlook brightens," said Barber.

Up to 46 percent of foreign respondents of the survey expect their company's investment in China to rise — the clearest signal from the survey that short-term caution is paired with long-term commitment, positioning for sustained engagement in the Chinese market.

This confidence is also reflected in the changing composition of Australian investment, said Barber.

Advanced manufacturing and high-value goods have jumped around 30 points into the top tier, alongside agribusiness, resource-efficiency technologies, and education and training.

Australian companies increasingly see China not only as a market, but also as a partner in industrial upgrading and skills development, said Barber.

"Taken together, these results highlight a relationship that is broadening and deepening — one that, over the next five years, will be increasingly defined by co-development and joint capability," he added.

Recommendations of the Central Committee of the Communist Party of China for Formulating the 15th Five-Year Plan for National Economic and Social Development have called for expanding two-way investment cooperation and fostering new strengths in attracting foreign investment in the coming five years.

The optimism reflected in the AustCham China report echoes sentiment among US businesses operating in China.

Sean Stein, president of the US-China Business Council, said that most US companies remain deeply committed to the Chinese market. "We've seen over the last nine or 10 months that there has not been a significant increase in US companies leaving China."

Stein said China is "enormously important" to US businesses, which goes far beyond its vast consumer market. "If you want to be globally competitive, you want to have China in your supply chain."

He pointed to the abundance of skilled Chinese talent — from researchers to welders and coders — and the speed of innovation as key factors driving US firms to deepen their footprint. "You can do research in China at 'China speed' in a way that you can't do necessarily in other markets."