China as a Global Supply Chain Hub? So Much Has Changed in 40 Years

In the early 1970s, I was a fresh-faced, new Ph.D. with big dreams, empty pockets, a beard and little hair.

Four decades later, I've got a company I'm proud of, a family that I couldn't live without, the same beard and even less hair. So much has changed for me over the past 40 years, including the world that I gratefully work in as a consultant, an engineer and a global entrepreneur.

In the 1980s, I was lecturing throughout China for the Chinese Secretary of Commerce with series of lectures on warehousing, inventory management and logistics (before it was even called supply chain). I could not have predicted or even come close to the world that we see today the proliferation of global marketplaces and the emergence of China as a global supply chain hub.

So let's take a brief look at what has change in the past four decades.
In 1970
There were roughly 3.7 billion people on earth, and China was the most populous country in the world.
Fifty-five percent of the world's population lived in four countries/regions: China (22%), India (15%), the area now known as the European Union (EU) (12%) and the United States (6%).
China's portion of global GDP was just less than 1%, while the U.S. had 26.5% and the EU was at 27%.

In 2010
The world's population was around 6.8 billion.
The same four countries/regions still had the largest population, but the number is now 49%: China (20%), India (17%), EU (7%), and U.S. (5%).
Global GDP was three times what it was in 1970, but China's slice of GDP was around 7%.
The U.S. portion of global GDP remained relatively constant over the past 40 years (around 26.5%), and there has been a relative decline in the share of world output during this same period by the EU members from 36% to 27%.

Recently, the rate of change has acchttp://www.tompkinsinc.comelerated exponentially. Just five years ago, China had only 16 companies on the Fortune Global 500 list and the U.S. had 176. In 2010, China had 46 companies on the list, and the U.S. dropped to 139.

Major changes are under way in today's global market, as China continues to evolve into a larger competitor in the industry.

You can find more facts and trends on how China is impacting global supply chains found in Tompkins' latest whitepaper, China is Changing Supply Chains Around the World: Facts and Trends.

Jim Tompkins
Tompkins Associates