China is becoming less of an investment priority for companies, with 56 percent of those in an American Chamber of Commerce survey placing the world's second largest economy on the top three spots on their priority list, down from the peak of 78 percent in 2012.
This comes as the companies highlighted five areas of concern covering opaque rules and laws, higher labor costs, Chinese protectionism, finding suitable management talent and difficulty getting licenses to operate, the annual survey of 462 companies released Wednesday revealed.
It found about a quarter of these companies are also either slowing down or pulling out of China as they brace for the third year of slowdown.
The non-profit organization also found that 83 percent of the companies think relations between the U.S. and China will deteriorate or remain the same this year.
About 80 percent said they felt less welcome than before, up from 77 percent the previous year.
Commenting on the survey, AmCham China's chairman William Zarit told CNBC's Squawk Box that 2017 will not be business as usual between the two economic giants.
"There is a sense that the Western countries, including the U.S., have been (very) open to the Chinese exports, to Chinese investments...which has helped the Chinese in the last 30 years with their incredible growth. However we don't see that we have the same open opportunities in China, whether it's in trade or in investments," Zarit said.