US companies operating in China are becoming more profitable, The Wall Street Journal reported yesterday.

"U.S. firms must grapple with the fact that their global competitiveness depends increasingly on how they fare in China," the report quoted a survey released by the American Chamber of Commerce in China as saying.

A solid 73-percent majority of the chamber's responding member companies said their China operations are profitable, up from 64 percent in the previous annual survey, according to the report.

Most companies also said their operating margins in China increased in 2006. The chamber's survey has shown 60 percent or more of member companies reporting improved margins every year since 2001.

In September last year, the European Union Chamber of Commerce in China released a survey, indicating that 83 percent of its member companies expected to be profitable for the year.