A Massive Windfall for China's Fast-Growing Tech Giants
Frank Holmes | Jul 03, 2018 12:07AM ET
Stop buying Iranian oil or face the music.
That’s the message the U.S. government shared with the world last week, giving importers until November 4 to cut their consumption of Iran’s crude to zero—or expect sanctions. The threat comes a month after President Donald Trump essentially regulations that could jeopardize the positive work Trump has done in cutting red tape in other areas.
Below is the Dow’s performance so far this year, not including today, annotated with some key moments in the Trump trade war. I chose the Dow specifically because it includes the very largest U.S. exporters, some of which do tens of billions of dollars in sales in China alone. As the biggest U.S. exporter, Boeing (NYSE:BA) delivered more than 200 aircraft to the Asian country last year, accounting for a quarter of the plane maker’s global sales. Apple (NASDAQ:AAPL) generated around 20 percent of its revenue in China, or the equivalent of $44.7 billion.
The question now is whether we’re headed for a recession, and how investors can prepare—though I believe the market is oversold, as I explain in the patent number 10 million. )
The Asian country, in fact, has more unicorns—or startups worth $1 billion or more—than any other nation on earth. Chinese unicorns account for more than half of the global total, and 66 percent in terms of valuation, according to the World Economic Forum (WEF).
Just look at the top 10 Chinese unicorns. Ant Financial, formerly known as Alipay, ranks first with a valuation of $145 billion. That’s about twice the value of the number one U.S. unicorn, Uber.
It’s very likely even more capital will flow into these firms this year and next. That’s because Chinese FDI in the U.S. fell an incredible 92 percent in the first half of 2018, as the government cracks down on capital flight. The decline is also likely in response to the U.S. government’s increased scrutiny of Chinese acquisitions.
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The S&P 500 Stock Index is a widely recognized capitalization-weighted index of 500 common stock prices in U.S. companies. The Dow Jones Industrial Average is a price-weighted average of 30 blue chip stocks that are generally leaders in their industry.
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