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The rebounding American financial sector is not the place to look for performance. High tech industries are still not making major gains in the U.S. There’s one place that America’s multi-nationals say they are turning to for profits, the only place in the world with a truly robust economy: China.

The American Chamber of Commerce in Shanghai (which calls itself AmCham) says multi-nationals no longer feel they have an option. Investment in China has become an absolute “must.”

A new AmCham survey shows the exact opposite of the U.S. investment scene. According to the survey, most companies plan to increase their investments in China in 2010, with three-quarters listing it as one of their top three global priorities.

"American companies are finding that their performance in China is the one bright spot in an otherwise difficult global picture," says J. Norwell Coquillard, the chairman of AmCham Shanghai.

More than 90 percent of companies surveyed said they had an optimistic business outlook on China. (AmCham surveyed 369 American companies with Shanghai offices). The overwhelming 90 percent vote of confidence in China is up from 80.7 percent in a similar survey in 2008.

AmCham also found that a stunning 64.5 percent of companies surveyed had plans to increase their investment in China next year. No such figure exists in the U.S.

The U.S. companies bullish on China include a wide range of multinationals, from agribusiness like Cargill and automakers like General Motors, to pharmaceutical companies which are moving research to China as well as many other high-tech companies.

With the value of the yuan dropping in tandem with the dollar, exports from China are falling in price and becoming more competitive on the world markets. But many U.S. firms are focused on domestic sales. Fifty-nine percent of U.S. companies surveyed are producing goods and services for the China market this year. That’s up sharply from a mere 39 percent last year.

All of this indicates a sharp rise in business confidence. U.S. firms are expecting a rise in sales to Chinese manufacturers and a continuing increase in domestic retail sales.

The only dark cloud on the horizon is the prospect of increased Chinese inflation from the declining yuan. China’s economy is moving into double digit expansion but the commodities it needs must be paid for with a depreciated currency. Some observers are predicting that Beijing will be forced to revalue the yuan if inflation becomes a problem.

Disclosure: No positions

Source: China: The Brightest Star on the American Investment Horizon