American businesses operating in China believe that U.S. President Joe Biden’s administration may help stabilize relations between the world's two largest economies.

The American Chamber of Commerce in China (AmCham China) announced the finding on March 9 in its 2021 Business Climate Survey. The report said that 45% of the 345 multinational companies surveyed expect relations between the U.S. and China to improve in the coming year, compared to 30% that said relations would improve in the previous year's survey.

Companies participating in the survey, which was conducted from Oct. 21 to Nov. 23, differed on how they viewed the future U.S.-China relationship depending on when they completed the survey questions. Thirty-four percent of the companies that took the survey before the Nov. 3 presidential election said U.S.-China relations would continue to deteriorate; of those who answered after the election, 11% said the same thing.

“With China leading in economic recovery and the new U.S. administration in place, our members are cautiously optimistic regarding business growth in China, with nearly half of them hopeful that the bilateral relationship will improve,” AmCham China chairman Greg Gilligan said in a statement.

Even with the Biden administration's fresh approach to China, companies are still concerned that bilateral tensions will hurt their operations. A majority of companies cited U.S.-China relations as their main business challenge, and 50% of companies said they remain pessimistic about the threat U.S.-China tensions pose to their business prospects, down slightly from the 51% who felt that way last year.

“We remain keenly aware that certain bilateral tensions will continue to create business challenges,” Gilligan said.

But there is reason for optimism among the multinationals AmCham China surveyed. Most of them are confident that China's continuing efforts to recover from the pandemic will provide a boost to their bottom lines.

In the report, 81% of 345 companies said they expected their businesses to grow in China after a pandemic-inflicted 2020 took a toll on revenue streams.

Last year, they said, profitability hit a record low, with 20% of the surveyed firms saying they incurred losses because of China’s COVID-19 lockdowns in the spring of 2020 and travel restrictions that impeded foreign staff from entering the country. Still, China’s ability to largely eradicate the virus and become the only major economy to grow last year meant that China emerged as an important source of revenue for the global companies.

The report said that 26% of the multinationals posted higher earning margins in China in 2020 than divisions based elsewhere, up from 22% who said the same in 2019.

The firms also signaled their top priority for future trade talks between Beijing and Washington: market access. In the survey, 71% of companies said they hoped that making it easier for foreign firms to do business in China would be high on the agenda of any trade discussions between the two powers.