Last year, KPMG China’s inaugural MNC China Outlook Report revealed that multinational companies (MNCs) operating in China were adapting, optimising, and further localising amid a maturing market and business environment, focusing more on resilience and profitability than on broad-based growth. How are MNCs fairing now in 2026 in the backdrop of China’s continuing economic transition and competitive business environment?
Confidence has improved, although cautiously:
- 59% are confident about China’s economic outlook in 2026, up from 51% last year. Confidence over the next three to five years has increased from 64% to 72%.
- 65% are confident about their China operations in 2026, compared with 50% last year.
- However, only 62% expect revenue growth. Though up from 55% in 2025, the improvement is still fairly modest.
Investment remains selective but resilient:
- 78% are maintaining or increasing investment in China, compared with 75% in 2025, including 37% that are increasing it, up from 25% in 2025.
- 18% are decreasing investment, versus 20% in 2025, and 1% are preparing to leave the China market, meaning 95% of MNCs continue to invest in China at some level.
Localisation is deepening:
- 83% have localised or plan to localise aspects of their China operations. The largest increases compared with 2025 are in sourcing, rising from 31% to 62%; management, from 19% to 49%; supply chains and logistics, from 50% to 64%; and R&D, from 40% to 47%.
The takeaway:
The overall takeaway is that MNCs are becoming more localised, selective, resilient, and closely connected to global innovation—neither returning to the broad expansion strategies of the past, nor retreating.
Download to read further insights and additional findings:
2026 KPMG MNC China Outlook Report
KPMG China's MNC Channel has officially released its 2026 MNC China Outlook Report, detailing the situation on the ground for MNCs operating in China.
