But U.S. and Europe are behind India in going after the Chinese market.
Chinese companies could become the largest grouping among the Fortune Global 500 by 2040 according to 60% of the 700 business leaders, government officials, leading academics and futurists from across 60 countries who participated in the survey entitled, "The Future of China's Economy, The Path to 2020 - Opportunities, Challenges and Uncertainties."
The survey, conducted by Global Futures and Foresight (GFF) and Fast Future, found other sweeping changes ahead:
- 30% believe China's economy will overtake that of the U.S. by 2025 and 73% believe it will happen by 2035.
- 89% of respondents think international companies will consider it essential to be listed on a Chinese stock market.
- 78% believe that the Chinese stock market will overtake the New York Stock Exchange in size.
Even with the knowledge of the importance of China as part of a strategic business plan, Europe and the U.S. are lagging behind their Asian counterparts in their plans for the Chinese market:
- 65% of respondents claim to have had no direct Chinese business experience.
- 65% of respondents receive no revenues or profits from China.
- 55% of respondents expect China to increasingly become the launch market for new products and services.
- 43% of Indian respondents were already generating revenues from the Chinese market, compared to only 25% from North America and 34% from Europe.
- By 2020, 25% of Indian respondents expect to earn over 40% of profits from China, compared to just 8% of Europeans and only 12% of North Americans.
"Many still seem to hope the 'China issue' will go away -- but hope is not a strategy. Western businesses need to recognize the opportunities that this powerful market presents and face up to the challenges. Business leaders are clearly worried about the impact China will have in their own markets and on western business practices. However fear of the unknown, a lack of market knowledge, language barriers, limited cultural understanding and concerns about corruption and bureaucracy are leading to hesitancy and inertia. The way forward is to start developing true market insight, take the first steps and learn by doing," said Rohit Talwar, CEO of GFF.
The study also found that there is a clear expectation that China's market power will transform the way the West does business.
- 45% of respondents think Chinese culture and business practices will enter western corporate life.
- 48% believe key industry and market decisions will be taken in China.
- 70% of respondents believe it will be considered normal for U.S. and European workers to be employed by Chinese owned companies by 2030.
China has been very active in pursuing its goals. "Chinese firms have increasingly ambitious overseas expansion plans and want to prove themselves in global markets. At the same time your competitors may be sourcing or manufacturing in China and taking advantage of the cost savings to compete with you in your domestic markets. Businesses of all sizes need to be clear on how they will respond," said David Smith, CEO of GFF.
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