China's top 10 economic challenges and the high-tech implications

11/8/2012 1:55 PM EST

We are not all racing to learn Mandarin yet, but most, if not all, working-age adults in the Western world and many developing nations know enough to keep an eye on news about and from China. For executives in all industry segments, China is the elephant in the room. It must be factored into any decisions about the future of their enterprise.

If any segment of the global economy can afford to ignore China's gargantuan role, it's not electronics. Over the last two decades, the industry has steadily and tightly yoked itself to the Asian nation. After transferring a majority of manufacturing operations and huge swathes of the supply chain to China, the industry faces the stark reality that it can no more do without China than the country itself could disengage from world markets and revert to a closed socialist economy.

Events in China will have a major impact on all the global economic segments that have become heavily dependent on the nation. This is obviously the case for the electronics industry. Most of its leading companies, if not all, have huge operations in China and are exposed to events there. Furthermore, the entire industry supply chain (not just the manufacturing end, as is commonly assumed) has significant exposure in China. As China goes, so does the industry.

In the last five years alone, China has set numerous records in high-tech marketshare. It has become the world's biggest consumer of semiconductor products, mobile phones, PCs, flat-screen TVs, solar panels, and a wide range of so-called white goods, including refrigerators and cooking ranges. By the way, it is just getting warmed up. As its middle class expands over the next decade (barring any geopolitical disruptions), China will overtake the Western world and become the leading market for medical devices and a range of other goods. Its aging population guarantees this.