The OECD (Organization for Economic Cooperation and
Development) published a report that shows that China's 2004 exports of technology goods - laptops, cell phones and digital cameras - was $180 billion, outpacing that of the U.S., at $149 billion. The growth has been driven by foreign direct investment from companies like Intel, Nokia, Motorola, Microsoft and Cisco Systems. In fact, 90% of the 2004 exports are from Chinese companies that received foreign investment.

What It Means:
Ten years ago, these companies invested in China just to gain access to their huge consumer market. Now, they are doing so to also take advantage of China's trained technology labor force. As China gains expertise and market share, they are producing items that are key to the U.S. defense industry. Finally, China is looking to use this expanded market share to push for imposing their own standards across a wide range of technology products.

Action Steps:
Chinese companies are difficult to invest in directly, so make sure your portfolio includes the companies listed above, that are profiting from China's new role. Also, make sure your portfolio includes companies from other Southeast Asian countries that are technology suppliers to China.