China’s Economy Will Soon Be Number 1
Gone are the days when America occupied the number one position in almost all sectors. China now poses the biggest challenge to American economic domination. In fact, the Chinese economy is projected to surpass the American economy in just a few years.
Just take a look at China’s top companies. Some of the biggest airlines in the world are from China. China’s premier travel service provider C-trip now surpasses Expedia in terms of market capitalization. Out of the 32 biggest auto manufacturers, an impressive 25% of them are Chinese. This makes China level with Japan and excels America which only has 3 in the list.
Tencent and Alibaba have already proved themselves to be the very best. Tencent is the world’s largest social media and gaming company. Albeit the margin may be small, Tencent has overtaken social media juggernaut Facebook in terms of market capitalization. Alibaba boasts the largest ever IPO in history at $25 billion. Host to the biggest B2B and B2C marketplaces in the world, Alibaba is the biggest retailer in the world with online sales and profits exceeding the combined efforts of retail juggernauts like Walmart, Amazon and eBay.
In Forbes’ ranking of 2000 global companies, the top ten slots belong to China and US where they stand level with 5 companies each. Almost all of the companies in this list are banks. On top of the list is the Industrial and Commercial Bank of China and the China Construction Bank. Apple Inc. from the US stands at number 9 while the rest are banks.
Out of the 200 top companies, an imposing 291 belong to China and Hong Kong. This is a significant improvement over 262 from last year. Back in 2003, China and Hong Kong possessed only 43 companies in this list. The pace of improvement is phenomenal to say the least.
The Portfolio Manager for Sorphus Capital Mike Reynal commented that China is growing at a far larger rate than what is being reported. He added that that the discretionary spending power of consumers in the region is “exploding.”
Although China’s economy may be second to America, it is ahead of Japan and catching up fast with America.
With the current projected growth rates of 2.0% for America and 6.5% for China, it is expected that the Chinese economy will overtake the American economy as early as 2029. This would have appeared to be a mere fantasy at the turn of this century. The future is upon us.
Currently, China is the biggest exporter of merchandise worldwide. According to WTO figures, the figure has reached an incredible $2,263 billion fuelled in large part by its explosive growth in e-commerce.
China’s foreign currency reserves were the highest at $3,140 billion as of December 2017, according to the International Monetary Fund.
With statistics like these, it is no wonder that China’s economy will very soon be number 1.