China's burgeoning economy has bolstered the confidence of foreign investors. A recent survey by the American Chamber of Commerce in Shanghai showed 80 percent of U.S. firms in China would like to increase their investment in 2011.

Profits and sales of about 80 percent of U.S. firms in China grew in 2010, and 90 percent of surveyed companies said they were optimistic about business in China during the next five years.

The Chinese market is poised to become even more important for U.S. companies and the U.S. economy in the years to come as an increasing number of U.S. companies succeed in China, said Eric Musser, Chairman of the American Chamber of Commerce in Shanghai.

Growing importance

Of the 346 firms surveyed, about 80 percent said they would invest more in China this year. More than a quarter expressed an interest in expanding to China's second- and third-tier cities. Those carrying out feasibility studies on new investment accounted for 20 percent, 6.2 percentage points higher than in 2010.

Last year, 87 percent of U.S. companies in China registered an increase in sales, 40 percentage points higher than 2009 and 10 percentage points higher than 2008. Moreover, 79 percent of U.S. firms reported profits, 14 percentage points and 9 percentage points higher than in 2009 and 2008, respectively.

At the same time, 73.3 percent of U.S. businesses in China said their sales growth rate in China was stronger than it was in the global market, while 18.8 percent said theirs were at a similar level.

Increasing returns

The survey showed 49.2 percent of U.S. companies in China made greater profits in China than globally last year, while 28.8 percent said there was no major difference between the Chinese and the global markets in terms of profits.

The survey also found 88.7 percent of U.S. companies said they believed their revenues would continue to grow in 2011, with 71 percent predicting a growth of more than 10 percent. Companies contemplating increasing investment in China by more than 15 percent accounted for 41 percent, double the rate a year earlier, while 8.5 percent were considering increasing investment in China by 50 percent. Another 70 percent designated China as one of their top three investment destinations around the globe.

Promising market

The United States is the second largest export market and a major source of investment for China. China is the United States' third largest export market and the fastest growing export market. It has also become the biggest contributor to many U.S. firms' global profits.

Even at the height of the global financial crisis in 2008 and 2009, more than 70 percent of U.S. firms in China generated profits. About two thirds of U.S. companies say they believe China is one of their three most important markets in the world. A fifth of them say China is their single most important market.