CNBC’s The China Connection Newsletter: Will US-China Relations Reset in 2026?

This report is from this week’s CNBC The China Connection newsletter, bringing you news and analysis on what’s driving the world’s second-largest economy. You can subscribe here.

For someone who has witnessed the ups and downs of tensions between the United States and China since the 1990s, James Zimmerman is surprisingly optimistic about 2026.

This year, he returned for a fifth term as president of the American Chamber of Commerce in China, whose members include Boeing and Cargill. His first term came in 2007 and 2008, when Beijing hosted its first Olympic Games and the financial crisis hit much of the world. He then served again in 2015 and 2016, as populist movements grew globally and gave Donald Trump his first term as president of the United States.

A decade later, American businesses have endured everything from the pandemic to escalating tariffs. But the last decade of what Zimmerman calls “competition experimentation” may now give way to something new, with Trump’s expected visit to China in April.

Here are highlights from our conversation, with answers condensed for clarity:

Why do you remain engaged at such a high level, after almost 30 years in China?

The reason I’m getting involved is because I think it’s a very important year.

2026 is important, not just because [it’s] the 250th anniversary of the United States, but the United States and China have had 10 years of experimentation with competition, calls for decoupling and risk reduction.

Did it work? Not really. So now it’s time to go back and, perhaps in a visionary way, get us back on track to have continued dialogues, continued engagement, because I think ultimately that will be in the best interests of both the United States and China.

Are many American companies dissociating themselves from China?

No, we are seeing an evolution. People are starting to adapt. For many sectors, China remains a critical market. But it is also an essential part of the global supply chain.

American businesses are adapting to this new normal in U.S.-China relations. But there has been some diversification, and that’s a healthy strategy that companies are considering, but we’re not seeing overall decoupling at all.

It is important that we have seniors–level meetings which bring a certain clarity, a certain certainty, a certain continuity to the relationship.

Dialogue matters — Even the smallest positive signals, at the presidential level, in terms of engagement are very, very important. Regular and ongoing engagement helps reduce any potential misunderstandings and reduce the risk of unexpected political shocks, such as trades on tariffs.

What kind of opportunities do U.S. companies have in China as domestic competition intensifies?

We have our white paper which, in a way, allows us to engage with the Chinese government to seek positive changes.

The protection of intellectual property does not only concern foreign companies. This is also a challenge for Chinese companies.

Both sides should tone down national security issues and not view every slight as a national security issue.

We cannot create an environment in which every stranger is considered a potential threat. And it goes both ways: When Chinese companies set up operations in the United States, we cannot view this as a threat to the communities in which they wish to operate.

Is the CEO of Chinese Operations Losing Influence Over US Headquarters?

This is something that needs more attention post-pandemic. But that’s just a circumstance, especially given what happened during the pandemic, when travel was halted.

But if you look at AmCham, the U.S.-China Business Council, and the National Committee for U.S.-China Relations, you now see an increased interest in making sure that CEOs, university leaders as well as congressional leaders go to China. [China to] understand what the environment is.

We try to encourage more exchanges between people. I will be traveling around the community to highlight the importance of education as well as the arts. For example, I’m going to a concert at the Juilliard School in Tianjin.

What is your program at AmCham China for 2026?

In some respects, we focus on April, when President Trump plans to come to China. We hope that AmCham can play a role in this regard. The focus is on this and I am sure there will be a lot of work ahead of this visit.

There will be agreements, understandings, perhaps a memorandum of understanding that could result from this.

We don’t expect a big deal. There just isn’t enough time. It was last summer and we were in the middle of a trade war. And only since October, when President Xi and President Trump met in South Korea, have we begun a process [around] let’s meet, let’s talk, let’s continue to engage.

So I think we’re on the right track, but we’ll just have to see the progress between now and April. But we are optimistic that the signals will be positive. And again, any level of trust that can be achieved in these meetings is, I think, very important to the business world.

Many of President Trump’s predecessors were very visionary about what they saw as the future of U.S.-China relations.

So this year, we hope that President Trump will also be visionary and seek to advance the relationship in a way that mutually benefits the United States and China, its businesses, its consumers, its workers, and its farmers.

China condemns the US attack on Venezuela. Beijing said it was “deeply shocked” by the American strike against Venezuela on Saturday and called for the release of leader Nicolas Maduro and his wife.

BYD leads Tesla in the world. The Chinese car manufacturer officially sold more battery-powered electric cars than Tesla in 2025 – at 2.26 million units.

Chinese companies are hitting Vegas. Many Chinese humanoid robotics and consumer electronics companies are in Las Vegas this week to showcase their products at the Consumer Electronics Show.

Chinese land stocks rose slightly on Wednesday, holding near a four-year high as Beijing continues to promote the development of its artificial intelligence sector.

Goldman Sachs expects the rise in Chinese stocks to continue through 2026, albeit at a slower pace. The bank expects the MSCI China index to rise 20%, while the CSI 300 index is expected to gain 12%, following last year’s 20-30% rise, largely driven by expanding valuations.

that of Hong Kong Hang Seng Index slipped more than 1%, pressured by losses in technology and energy stocks. Alibaba fell 4%, BYD fell 3.38% while PetroChina fell 3.15%.

January 8: Chinese AI company Z.ai, formerly Zhipu AI, will list in Hong Kong

January 9: CPI and PPI for December

January 14: Commercial data for December (expected)