KPMG Report Reveals Strong MNC Confidence in China's 2026 Economic Outlook

Multinationals Express Strong Confidence in China's Economic Future

A new report from KPMG, titled '2025 China Outlook for Multinational Corporations', reveals significant optimism among multinational corporations (MNCs) regarding China's economic prospects. According to the report, released in December 2025, a substantial 94% of surveyed MNCs express confidence in China's economic outlook for 2026. Furthermore, 75% of these companies intend to either maintain or increase their investments in mainland China in the coming year.

The findings are based on an in-depth survey conducted between June and September 2025, polling 137 senior executives from global firms operating in China. This robust commitment comes despite a global economic slowdown and evolving market dynamics, with only 1% of respondents indicating plans to exit the Chinese market.

Strategic Shifts Towards Profitability and Localization

The KPMG report highlights a notable evolution in the operational strategies of MNCs in China. Approximately 60% of the surveyed companies have shifted their primary focus from pure expansion to profitability optimization within the Chinese mainland. This strategic pivot is accompanied by a strong emphasis on localization, with 83% of MNCs localizing operations such as manufacturing, supply chain management, and research and development (R&D).

Mark Harrison, Co-Leader of Multinational Corridors at KPMG China, noted a significant increase in mergers and acquisitions (M&A) activity. MNCs are actively acquiring companies in high-performing sectors to leverage global business potential and better serve Chinese consumers. Key sectors attracting increased M&A and investment include:

• Electric Vehicles (EVs)
• Medical Technology
• Biotechnology
• Water Technology
• Advanced Materials
• Robotics

Digital Transformation and Long-Term Commitment

Digital transformation stands out as a critical priority for multinational enterprises in China. Over 90% of the surveyed companies are planning or have already initiated digital investments. This includes strengthening data analytics capabilities, upgrading IT infrastructure, and enhancing operational efficiency through localized innovation.

MNCs demonstrate greater confidence in China's economic prospects compared to the global economy, with 64% expressing moderate or greater confidence in China over the next three to five years, versus 42% for the global economy. This long-term commitment underscores China's ongoing transformation from a 'world's factory' to a 'global innovation hub', presenting unprecedented opportunities for multinational enterprises.