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), Yahoo! (YHOO) and Microsoft (MSFT).
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.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV