How much are multinational companies dependent on China?

From Netease:


Report on Wednesday said, the ambitious Starbucks is continuously expanding in China, but customers staying in Starbucks not leaving is a major obstacle of expanding in China – “Customers love these shops too much, they sit there for hour after hour, and sometimes without buying any coffee at all.”  In fact, although these multinational companies have amazing rate of expanding in China, looking at the sales numbers comparing with total global sales, China is still relatively a small market, this probably has little to do with customers staying in the shop for too long.

As of 2010, Starbucks has 459 stores in China, but the average Chinese consumer drink coffee three times a year.  To buy a cup of 12 ounce caramel macchiato, consumers in Easter China need to work 1.3 hours, consumers in Western China and central parts of China need to work 1.6 and 1.9 hours.  Starbucks has 10.71 billion dollars in total revenues in 2010, but revenue in China is only 358 million, only 3.3% of the global revenues.

Just how dependent are multinational companies on the Chinese market?  Would they be brought to their knees without the Chinese market? We found many companies’ annual reports, the data may disappoint many people – in fact, Chinese market isn’t very important to the majority of multinational companies.   Carrefour supermarket which are now everywhere in China still has main revenue in France.  In 2011 the Chinese market revenue of 8.169 billion euros is less than 10 percent of its global revenue.  Even Coca-Cola can be seen almost anywhere in the world, it’s revenue in China only accounted for about 7% of its total revenue.  Amongst the most common multinational companies, perhaps only KFC under Yum! Brands would have a hard time leaving Chinese market – KFC’s revenue in China is 49.8% of its total, almost half of its share.

The Economist Intelligence Unite (EIU) released at the end of the investigation report also supports this conclusion.  The Economist’s report shows that the global financial crisis in multinational companies, especially large multinational companies are more dependent on the Chinese market in order to bring in more revenue.  But for most of the multinationals China is still a relatively small market.  This report is based on a survey of 328 non-Chinese multinational senior management, and in-depth interviews with large foreign multinational executives, business academics and market analysts.  In this survey, only 8% of respondents believe that China is their biggest market, 17 percent of companies expect China to become its biggest market within five years, and another 21% of the companies believe that this situation will occur within 5-10 years.

70 multinational companies surveyed, only 10 companies have more than 20 percent of its global revenue from China last year, including Mead Johnson, Cartier, BHP Billiton, Yum, Advanced Micro Devices, etc. and half of the above companies have less than 10% income coming from China.

The survey also shows that, although multinational companies are still optimistic about China, there are signs of global distribution of their investments, in order to balance their overall strategic layout.  Among all respondents, 37% think China is essential to their global strategy, however the 2004 survey showed 53%.  Another 33% of respondents believed that the Chinese market, though not to have crucial role, but also has important strategic significance.  This number also declined from 2004 survey’s 41%.


  1. SomeTibetan men have died after setting themselves on fire in front of a monastery in Sichuan province, south-west China.

    BBC says that the region has seen a string of self-immolations to protest China.

    After they set themselves on fire, the two men appeared critically injured and were taken away by local residents, reports say. But rights groups said the men later died.

    Verifying these accounts is difficult, as foreign media are not allowed into the area.

    The Chinese claim that the Dalai Lama, the Tibetans’ exiled spiritual leader, is responsible for inciting the self-immolations and encouraging separatism, something he denies.

    BBC and the British Empire wants Tibet back and they will say anything bad China to get what they want without any verifying of the accounts.

    Why are the Tibetan monks taking so long to kill all of their cult?

    And why have these white ass kissing Tibetan terrorist monks not blowing themselves up in India like the good Islamic terrorists are doing in Europe, to get what they want?

    1. Yes, but just a few days ago, they reported the latest quarter’s results and China is now roughly 20%, about $8B of $40B.

      1. I suppose that might have something to do with when various countries’ citizens go on their yearly buying spree (i.e. Q1 includes Spring Festival, Q4 includes Christmas), so you can’t judge the relative weights by just one quarter, particularly that one.

  2. Crime one of world’s ‘top 20 economies,’ UN says

    Proceeds from criminal business top $2.1 trillion US annually

    Criminality worldwide generates proceeds in the trillions of dollars each year, making crime one of the world’s “top 20 economies,” a senior UN official said Monday.

    With the scope of global crime — and particularly organized crime — threatening emerging economies and fomenting international instability.

    Fedotov, the head of the UN Office on Drugs and Crime, said that “criminal business” in the west earns those behind it $2.1 trillion US a year, which he said is equivalent to nearly 7 per cent of the size of the global economy.

    And China working too hard for the money. WTF?

  3. Great BCG matrix!
    Perhaps another company that should be on there is Apple.
    While, it doesn’t separate out China from Asia Pacific in its result, the figures released yesterday ( ) were very impressive. Asia Pacific now accounts for a quarter of its revenue and that revenue is growing at 114%

  4. Wow, slow news month in China?

    Just close down shop if you can’t post something at least once every day or so.

  5. Last time I checked both KFC and Pizzahut are subsidiaries of Yum! Brand. What’s the point of splitting them up for the sake of this terrible looking graph? In the next decade I expect more drug companies to derive its revenue from China. Although patent enforcement will be very tough and most if not all domestic pharmaceutical companies are SOE’s thus creating many conflicts of interest. However many U.S. based drug companies are land grabbing in china. Three essential items that the Chinese people will expend irregardless of inflation would be education, food, and healthcare, which explains the large number of food companies in the report.

  6. The UK and Amerika don’t need China any more, just give them Chen.

    “A blind, self-taught lawyer and symbol in China’s civil rights movement, Chen embroiled Washington and Beijing in their most delicate diplomatic crisis in years after he escaped house arrest and sought refuge in the U.S. Embassy last week. He left six days later under a negotiated deal in which he and his family were to be safely relocated in China so he can formally study law. But he then upended the agreement by saying they wanted to go abroad.”

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