Barclays analysts visited China and came back saying it was one of the most bearish trips they've ever taken

As China's economy boomed, US industrial companies made serious investments in helping to build infrastructure, helping to drive growth in the country and their bottom lines.

This relationship, however, appears to be at an end.

"We are just back from our annual (since 2003) trip to China, and this one definitely fits in the top-quartile of bearish field trips," Barclays Scott Davis wrote. "We suspected that our forecasts for China industrial growth (for U.S. Multi-Industry) would need to come down, but it's worse than we had hoped."

Davis said that the decade and a half of US industrial companies raking in serious gains from China is over.

"We suspected that foreign direct investment would slow but, in fact, it has essentially stopped," wrote Davis in a note to clients Monday. "Our average company is consolidating factories and working to pull capital out of the region."

Davis originally estimated that US Industrials, which make any number of large products from escalators to electrical grid infrastructure, would grow revenues in China 4-5% in 2015, and they have done so year-to-date. After the trip, he adjusted that to a rate of 2-3% for the rest of the year and only 1-3% in 2016.

According to Davis, these large industrial suppliers - such as General Electric, 3M, and Ingersoll Rand - have been able to grow their margins through investments in China for 15 years, and now there is nowhere to go:

Davis cites 4 reasons for the end of the era in China:

1. "Anti-Corruption Campaign a Bigger Deal than We Had Thought." Before the year-long corruption campaign, many US industrial companies could differentiate themselves during contract bid processes as clean companies, which won them contracts despite higher prices, Davis wrote. Now, with the Chinese government bringing down the hammer on shadier Chinese companies, this gap is shrinking.
2. "Excess Capacity." Davis said that he toured many US company's factories in China and they were running under peak capacity. This, combined with a more vacant real estate and a focus on growth in smaller cities, means that there are simply less things to make.
3. "Local Chinese players are building skill in manufacturing." Davis said that in previous trips, Chinese-owned factories were disastrous but that has turned around significantly. He cites more skilled workers, better facilities and better manufacturing techniques as examples of the quality improvements.
4. "Export of Technology." Not only have the Chinese begun to take on their own industrial projects within the country, but they are beginning to export these efforts to other emerging markets as well. Since Chinese companies have the backstop of the government, they are willing to do projects at lower margins and higher risks, cutting off a source of growth for US industrials.

This is the middle of a significant shift, says Davis, and it's a tough road ahead for US companies that many won't survive.

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