U.S. companies in China remained optimistic about the business environment but would be more cautious in making investments due to rising costs and narrowing profit margins, a survey showed on Wednesday.

The survey, by the American Chamber of Commerce in China (AmCham-China), showed over 80 percent of the 365 respondents perceive China's investment environment as improving or staying the same.

Some 75 percent are optimistic or slightly optimistic about their business outlook in China in the next two years, according to the survey.

But despite the short-term optimism, the companies are increasingly cautious about future investments as growth in revenue and profits slowed.

The percentage of companies reporting substantial revenue increases fell for the third consecutive year in 2013, according to the survey.

Among the challenges of doing business in China, 68 percent of respondents still characterize the enforcement of intellectual property rights in China as ineffective, and 40 percent felt that foreign companies are singled out in pricing and anti-corruption campaigns.

"The survey reflects the current realities of operating in China and the associated uncertainty, but also the optimism and confidence among AmCham China members that the country's leadership is set on reform and that foreign business has an important role in China's future," said AmCham China chairman Gregory Gilligan.

Regarding China's ongoing reforms, 35 percent of the surveyed expect a positive impact from the Shanghai Free Trade Zone and 44 percent expect the same from the bilateral investment treaty.

China's economy grew 7.7 percent last year, overshooting the official target of 7.5 percent. The government announced earlier this month that the goal would be unchanged for 2014 to allow more room to push ahead necessary reforms for the long-term good.

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