China's Impact on Global Business: Insights and Strategies for American Companies

1. How China Will Change Your Business Inc. Magazine, March 2005 Brian Williams Silvestre Trujillo

2. Summary • China can come at you in a lot of ways, from all directions • World’s largest maker of TVs, DVD players, and cell phones • Closing in on becoming leader in biotech and computer manufacturing • China has the power to enter pretty much any market • Article listed 14 important truths that American’s need to acknowledge about China’s rise

3. China’s economy is larger than the official numbers show • In 2003, official GDP was $1.4 trillion, but is estimated to be somewhere around $6.6 trillion • Incentives to underreport • Only measures legal economy

4. China can be a bully • From 2000-2003, exports of wooden bedroom furniture rose from $360 million to nearly $1.2 billion • American furniture work force dropped by 35,000 • China now makes 40% of all wooden furniture in the U.S.

5. China now sets the global benchmark for prices • “China price” • Prices fell in nearly every product category where China was the top exporter between 1998 and 2004 • Personal computers 28% • TVs 12% • Cameras and toys 8%

6. No company has embraced China’s potential more vigorously than Wal-Mart • Estimated that 50-85% of Wal-Mart goods come from China • 10-13% of everything China sends to the U.S. ends up on Wal-Mart’s shelves • More than 80% of Wal-Mart’s 6,000 factories are in China

7. Piracy is a problem http://www.youtube.com/watch?v=FA6k54wPVfk

8. Questions • Do you think there are any ways American companies can protect themselves from piracy? • Do you think that China could potentially become a superpower? • Do you think countries will start leaving China and what other countries do you believe will become the “new China?”