S The China Is A "Paper Tiger" Thing Revisited

I have been giving more thought to my claim that China is a “paper tiger” and I thought it worthwhile to look a little deeper into the analysis that led up to that claim—the market value of the Forbes Global 2000.  Rather than just simply look at that data by country and international groupings, I thought it would be interesting to go one “layer” lower and look how those same countries and international groupings compared in each of the ten business categories that were used to define the total scope of all those businesses.

The ten business categories are: (1) Consumer Discretionary—autos, trucks, furniture, discount stores, furniture, recreational products;(2) Consumer Staples--food, beverage, tobacco; (3) Energy--oil and gas; (4) Financials--banks, insurance, real estate, investments; (5) Health Care—health care services, medical equipment, pharmaceuticals, biomed; (6) Industrials—airlines, trains, aerospace, equipment, construction; (7) Information Tech—computers, communications, electronics, semiconductors, software; (8) Materials—diversified metals and chemicals, iron and steel, construction materials, specialized chemicals; (9) Telecommunications—telecommunication services and media; and (10) Utilities—diversified utilities, electric and natural gas utilities.

Now I spent the time trying to give you a broad sweep and idea as to how “global” business is viewed from the Forbes Global 2000 perspective.  As you can see the list is comprehensive.  Almost all the Forbes Global 2000 businesses can be solely placed in one of the above ten categories.  Conglomerate businesses are much harder to place in one category alone.  Conglomerates account for about 1% of the total global market value so they are not a large factor.  In my analysis I put conglomerates into the industrial category.

Below you will see the level of business activity in each of the above ten business categories by international groupings.  The data is based upon 2020 Forbes data.    


What does the above graph tell us?

Well, let us just start out with the big one.  The United States dominates.  Period.

Maybe the United States does not dominate every category, but it sure does for the big categories.  And even in the small categories like Telecommunications and Utilities, the United States does very well.

So what does that tell you?

It tells you that the United States is the big boy in town and should reserve the right to lead the global community forward from this day forward. And it really means China should be viewed as a “paper tiger” from a business view standpoint.

One of China’s most competitive business areas is in Finance, by all means.  We all know why they are high in that category.  It is because of the balance in trade.  That is going to change now with President Biden’s new initiatives to increase the focus on new chip development, new batteries, and new materials developed in the United States.  Not shown in the above business figures, the United States with its touted national laboratories and school systems has the best talent in the world there, too.

It is just a matter of time before the world discovers the truth.  

Disclosure: No positions.

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Jack S. Chen 1 year ago Member's comment

Thanks for the read.