China’s #1… and maybe with room to run
Is the Chinese bubble about to burst? Or is there still plenty of room for this bull to run? Even Jim Rogers says he'll bail if the Shanghai Composite reaches 10,000 by next February (as I write it's 5667)… but now comes some interesting anecdotal evidence that suggests momentum remains with the China bulls.
It's a fascinating article with an even more fascinating chart in the New York Times listing the world's 20 largest companies in 1989, 1999, and today.
In 1989, the list was dominated by 14 Japanese companies. And those 14 accounted for nearly 3/4 of the value of the top 20.
In 1999, the list was dominated by 14 U.S. companies. And those 14 accounted for 3/4 of the value of the top 20.
And today?
Well, China's number one… but it's not nearly as dominant as Japan in '89 or the U.S. in '99.
Eight of the 20 biggest companies are Chinese, and they account for 41% of the value of the top 20. And while the biggest company in '89 was Japanese (Nippon Telegraph and Telephone) and in '99 was American (Microsoft)… the biggest company today is still American (ExxonMobil).
None of this is to say that China is destined to reach the same level of dominance as Japan at the end of the 80s or the U.S. at the end of the 90s… but the parallels sure are interesting.
The other interesting thing is that while banks dominated the list in '89, and tech/telcom in '99… what's the dominant sector today? Eight of the top 20 are energy companies — another sure sign of a new energy crisis that's just getting cranked up.
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[...] Check it out! While looking through the blogosphere we stumbled on an interesting post today.Here’s a quick excerpt and Telephone) and in 99 was American (Microsoft) the biggest company today is still American [...]
Pingback on October 22, 2007 @ 9:39 am
Interesting. First, Japan, then us, then China. Makes me wonder who will be next - India?
Comment on October 22, 2007 @ 2:27 pm
We are at the tipping point. The US has squandered its moral, political and financial capital. The future belongs to China.
Comment on October 22, 2007 @ 2:49 pm
Was it China Mobil, as in Exxon/Mobil, or was it China Mobile, as in Mobile Communications?
Comment on October 22, 2007 @ 3:42 pm
64 years ago I had a college History Professor ( who later became listed in “Who’s Who in COllege Professors”) . I remember only one thing from her course:
She stated that historically the leading
country had always passed to the West….in recent history: Greece, Rome, France, Spain, UK, USA…. She then posited the question “What country would be next?” The only answer was Japan/China.
Comment on October 22, 2007 @ 5:11 pm
Two points,
Politicians in the US OF A do not have a bit of interest in the well being of the NATION,
Secondly , the citizens for the most part, want the Govenrment to save us ALL
Entirely a different attititude fron the 18 & 19 hundreds.
We get what the idiots want
Comment on October 22, 2007 @ 5:27 pm
very interesting - you forgot to mention the huge dollar amount China has to buy American business and assets - or their effect on the price of natural resources
Comment on October 22, 2007 @ 9:16 pm
I’ll have to read the article, but it is a great point. I do believe you may be missing the most interesting part. Look at the dates and then ask yourself, what happened next to the ‘leader’. Nikkei peaked on the last trading day of 1989, Dow peaked at Jan 14, 2000. To me the question is if China will peak just after the Olympics or at the end of 2009?
My bet is just after the Olympics. I have lived in China for the past 6 years and have been coming here for 18 years. I speak Chinese and do business here. Business is booming, but strains are very clear also. Inflation is getting out of control and starting to show up everywhere, labor shortages are endemic (there are plenty of workers, but they are not willing to take super lower wages anymore). I believe a lot of companies are using accounting measures to prop up earnings as raw materials are rising fast, along with labor rates, but finished goods prices can only make 3 to 4% increase. Middle men are getting squeezed hard now, the easy money is gone for them, or at least some of them. The well connected still will profit handsomely.
Comment on October 22, 2007 @ 9:42 pm
[...] Compared to their total absence on the same list in 1989 and 1999, China’s growth appears all the more incredible. Companies like PetroChina, China Mobile and Bank of China are well within striking range of the top three positions. The mutation is happening faster than we expected. Post your comments here. [...]
Pingback on May 4, 2009 @ 8:50 pm