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TheStreet Open House

3 Big Tech Winners in China

NEW YORK ( TheStreet) -- China may be the looming threat to America's status as the global economic powerhouse, but the People's Republic also represents a major revenue boost for Silicon Valley heavyweights Apple (AAPL - Get Report), Yahoo! (YHOO - Get Report) and Microsoft (MSFT - Get Report).

Figures recently released by the International Monetary Fund predicted that China will surpass the U.S. to become the world's largest economy by 2016. Economists polled by Reuters expect strong economic growth of 9.5% in China this year, at a time when the U.S. is eyeing growth between 3.1% and 3.3%. Figures released by the Chinese Government put the country's Internet users at 457 million at the end of 2010, a 73 million hike on the prior year.

Set against this backdrop, experts see lots of upside for some American tech firms, despite the censorship issues there that have presented major challenges for Internet-based firms like Google (GOOG) and social networkers like Twitter.

"The U.S. companies that do the best are the ones not in sensitive areas, like user-generated content -- I believe Facebook and Twitter don't have a shot here -- but those with investments or autonomous operations here," said Lucas Englehardt, CEO of Shanghai-based research group BloggerInsight. Apple, he added, is doing very well in China, and will continue to do so.

Yahoo!, with its significant stake in Chinese Internet behemoth Alibaba Group, should continue to see upside, while Microsoft is expected to turn the country's economic growth into new software revenue.

Other CEOs across the tech sector have been highlighting the opportunities there, as well.

"I was in Shanghai last week and there's a lot of government investment going on in the country in terms of infrastructure, and there's a growing middle class," Abhi Talwalkar, CEO of semiconductor specialist LSI (LSI) told TheStreet after the company's recent earnings.

"We're doing well in the large dot.com fraternity in China and the rest of Asia," added John McAdam, the CEO of F5 Networks (FFIV), pointing to China's growing Web sector, led by the likes of Baidu (BIDU), SINA (SINA) and Sohu (SOHU).

"China e-commerce is very, very compelling," said Sandeep Aggarwal, senior Internet and software analyst at Caris & Company. "It's a perfect storm happening in this market."

Read on for more details on how Apple, Yahoo! and Microsoft are riding China's tech wave.

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