You hear about China's rise everywhere in the news: China beats the U.S. in test scores, China beats the U.S. in construction, China beats the U.S. in Olympic diving. All of these metrics swimming around can get murky after a while, but to help us keep track of what exactly China is winning, here is a breakdown in how China and the U.S. stack up across several measures.
Computing
In February, China overtook the U.S. in smartphone activations, grabbing 23% of worldwide activations compared to America's 22%. This means companies such as Microsoft (Nasdaq: MSFT), Apple (Nasdaq: AAPL), and Google (Nasdaq: GOOG) that want to establish market share in China must grab their customers now. Microsoft, which announced the goal of becoming the No. 1 smartphone operating system in China, aims to attack the market with lower priced options than the iPhone. This year, it is expected the Windows Phone will hold a 7.5% market share in China, while Apple takes 12%, and Google's Android gobbles up 70%.
Last year, China passed the U.S. in PC sales in the second quarter, accounting for 22% of the market to America's 21%. And while the U.S. is expected to remain on top for total sales in 2011, forecasts call for China to outstrip the U.S. in 2012.
Energy
In 2009, the International Energy Agency estimated that China burned 4% more total energy than the U.S., which incorporates everything from oil to renewables. And in 2007, according to The Wall Street Journal, China passed the U.S. in carbon dioxide and greenhouse gas emissions. The U.S. continues to trump China on energy use per capita at more than 7,000 kg of oil equivalent compared to the Chinese at about 1,700 kg.
Looking into the future, China invested a whopping $54 billion in clean energy in 2010, versus only $34 billion in the U.S., with the Chinese aiming to increase nonfossil-fuel energy consumption to 15% of its total consumption by 2020. Several U.S. states have similar legislation that varies across percentages and years.
Gross domestic product
While it's true that China beat the U.S. and the rest of the world last year in the number of Rolls-Royces and Lamborghinis purchased, U.S. GDP is still more than double that of China's. This lead won't last long, however, as the International Monetary Fund projected that China would pass U.S. GDP by 2016. Others, such as The Economist, project China on top by 2018. China's pro-business policies have encouraged this growth. For example, Muhtar Kent, CEO of Coca Cola (NYSE: KO), said it was easier doing business in China, and the company will invest $4 billion in China over the next three years. Still, the U.S. brings in 41% of Coke's revenue compared to 7% from China.
Cars
In 2009, China passed the U.S. in car sales, and in 2010, General Motors (NYSE: GM) sold more cars in China than in the U.S. for the first time in history. That year, GM sold 29% more cars than the year before, and in 2011, it sold 8% more year over year. China, though, has fewer cars per person, with 37 cars per 1,000 people versus America's 808 cars per 1,000 people.
The tally
To summarize where China and the U.S. stand:
|
Metric |
China |
U.S. |
|---|---|---|
| Smartphone activations | X | |
| PC sales | X | |
| Energy use | X | |
| Energy use per capita | X | |
| Greenhouse gas emissions | X | |
| Clean energy investment | X | |
| Rolls-Royce and Lamborghini purchases | X | |
| Current GDP | X | |
| GDP in 2020 | X | |
| Coca Cola sales | X | |
| General Motors sales | X | |
| Cars per 1,000 people | X |
This chart obviously leaves out several metrics, but it's clear that China rides on the wave of a dramatic economic change. As companies such as GM earn a greater share of revenue from China, tailoring products to the Chinese and forecasting Chinese trends become extremely important to capture the country's growth. To reveal three companies that succeed in emerging countries such as China, and are gobbling up profits worldwide, read our free report: "3 American Companies Set to Dominate the World."
