U.S.-China Relations Barometer

Key Takeaways

• The situation at present: Though U.S. hostility toward China spiked after “balloongate” in late January 2023, public rancor over the issue appears to be fading. The share of U.S. adults holding unfavorable views of China has declined since April and is now just below pre-balloongate levels. Chinese favorability toward the United States has also rebounded, with shares holding positive views increasing roughly 5 percentage points since July. U.S. Treasury Secretary Janet Yellen’s visit to Beijing that month — which was well received by the Chinese public — likely played a contributing role.

   

  China’s struggling economy may also be tempering nationalist sentiment and outward animosity, with unfavorability toward the United States falling roughly 11 points since China’s reopening in January. The shares of U.S. and Chinese adults who view the other side as an enemy or unfriendly similarly declined by roughly 14 and 9 points since March, respectively, suggesting additional factors are also at play. These trends bode well for U.S. Commerce Secretary Gina Raimondo’s visit to Beijing in late August.

   

• H2 2023 outlook: Public views appear to be softening somewhat despite the official rancor, but our expectations are tempered. Majorities of U.S. and Chinese adults expect bilateral military and economic tensions to escalate in the coming year. As such, de-risking supply chains continues to be a prudent course for companies heavily invested in China. That said, the Chinese public remains eager for foreign investment as Beijing’s anticipated economic recovery falters. Those willing to brave the tricky business environment and whose investments create jobs — particularly for younger adults — could reap reputational rewards amid China’s woeful employment landscape.