US lifts China sentiment, but tensions cloud outlook in Japan, Morgan Stanley report says
Global confidence in China ticked higher in the third quarter, Morgan Stanley says, driven by US companies and policy support in Beijing
Global business sentiment towards China improved in the third quarter of 2025, led by a sharp rebound among US companies, but growing concerns in Japan over tensions with Beijing over Taiwan are dragging on the overall outlook, according to a Morgan Stanley report.
The US investment bank’s AlphaWise Global MNC China Sentiment Index rose three points to 31, placing sentiment in the “slightly positive” range and signalling a gradual recovery in confidence towards operating and expanding in China.
The quarterly survey, published on Tuesday, analysed earnings-call transcripts from 396 multinational firms using artificial intelligence, drawing on 1,241 qualified data points related to China.
Western companies were weighted more heavily as key drivers of global capital flows.
The improvement was driven mainly by US companies, whose sentiment jumped 18 points from the previous quarter – the biggest gain among all regions. Morgan Stanley said the rebound reflected easing trade tensions between Washington and Beijing, following a renewed tariff truce that had reduced fears of further escalation.
Sentiment in Europe and emerging markets also improved modestly.