The inevitable appears to have finally occurred: China surpassed the United States as the No. 1 exporter of information technology goods during 2004, according to research from the Organization for Economic Cooperation and Development.
The numbers are startling. China exported more than $180 billion in digital cameras, laptops, and other gear in 2004. The U.S., over the same period, shipped roughly $149 billion worth of those goods. That amounts to a spectacular turnabout. During 2003, China exported $123 billion in equipment, while the U.S. sold $137 billion in IT products abroad.
Even more worrisome is that the U.S. counts China as its major foreign supplier of tech gear. And its share of the business is rising rapidly. Chinese exporters accounted for approximately 27% of imported tech goods last year, versus just 10% in 2000.
Like fellow Fool W.D. Crotty, I'm an old-school tech head. I even did some programming on a Tandy TRS-80 computer many years ago. So you might imagine that it pains me to see China take a big lead in a market that's supposed to be as American as apple pie and baseball.
The Foolish investor in me, however, dances to a different tune. All he sees is opportunity in a broader tide shift that might be at work. And I'm not talking about the overhyped, overpriced dog that is Baidu.com (Nasdaq: BIDU ) .
But this story doesn't begin and end with equipment makers. Instead, it suggests that China has finally turned the corner on all things tech and that it may be the premium global supplier of software, hardware, components, and -- dare I say it? -- digital entertainment for many years to come. And that leaves you, the investor, with a choice to make: Either profit by taking a closer look at Chinese Rule Breakers such as NetEase (Nasdaq: NTES ) , Shanda Interactive (Nasdaq: SNDA ) , and other such companies, or ignore them and leave the profits to others. Not much of a choice, is it?
There are 1.3 billion reasons to invest in China. Here are a few more:
- There's big, organic growth to be had in China.
- Can Shanda profit with a new model?
- China is about the only place where the sun still shines on General Motors (NYSE: GM ) .
Shanda and NetEase are bothMotley Fool Rule Breakerspicks. All told, David Gardner and his team of Foolish analysts have made selections for the Fool's rebel portfolio. And the returns are smashing the market by more than 14% as of this writing. Get in on the action by taking a risk-free 30-day trial to Rule Breakers. Or sign up for one year and getStocks 2006, which features our analysts' best ideas for the year ahead, free. Everything is backed by our airtight money-back guarantee. All you have to lose is the prospect of better returns.
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Fool contributor Tim Beyers swears his portfolio isn't made in China. Tim didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out what's in his portfolio by checking Tim's Fool profile. The Motley Fool has an ironclad disclosure policy.