Competitors like Samsung and Huawei are winning with low-priced offerings. That’s where BlackBerry Ltd (NASDAQ:BBRY) and Nokia Corporation (ADR) (NYSE:NOK) need to focus – and fast – if they want to recover market share in China. The good news: Nokia Corporation (ADR) (NYSE:NOK) and BlackBerry Ltd (NASDAQ:BBRY) have a second chance – according to a past article in the Wall Street Journal, Chinese consumers tend to try new phones more frequently than other types of consumers.
Claim those fields
Oil production falls into the secondary sector. China still has lots of demand for oil, but consumption growth is falling. Just this month, the EIA lowered its 2013 forecast of Chinese oil demand growth from 4.4% to 4.1%. BP plc (ADR) (NYSE:BP) makes some very detailed forecasts for Chinese energy in 2030. For example, BP plc (ADR) (NYSE:BP) projects that industry will remain the largest consumer of energy but see the slowest growth of any sector over the next 17 years. That lines up with Dr. Haltmaier’s predictions about the secondary sector’s slowing growth.
BP plc (ADR) (NYSE:BP) also forecasts China’s energy production to rise 46% by 2030. This means that American oil companies have to get in there fast – they can’t afford to wait while Chinese oil players maximize production in the second-largest oil consuming nation.
Good thing Chevron Corporation (NYSE:CVX) isn’t waiting around. 2012 saw Chevron Corporation (NYSE:CVX) spend $558 million on exploration in Asia, in contrast to BP plc (ADR) (NYSE:BP)’s $128 million. In January, Chevron obtained rights to explore two Chinese offshore blocks for oil and gas. It already has majority interest in three other offshore exploration blocks, a strong proposition because exploration blocks hold prospects for future production. American oil companies need to follow Chevron Corporation (NYSE:CVX)’s lead and lock in Chinese acreage before the local oil companies begin snapping up land and over-producing.
Dividing the pie
If businesses want a slice of the China pie, they need to establish themselves quickly before low-cost producers grab up the market share. Samsung laid a strong foundation and Chevron is staking its claim in the South China sea. But other foreign multinationals don’t have much time.
The article Pay Attention to China’s Sector Shift originally appeared on Fool.com and is written by Marie Palumbo.
This article was written by Nathan Adamo and edited by Chris Marasco. Chris Marasco is Head Editor of ADifferentAngle. Neither has a position in any stocks mentioned. The Motley Fool recommends Chevron. Marie is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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