A bull sculpture stands on a desk at a stocks market in Nantong, Jiangsu proovince, China on 10th July 2015.
The U.S. stock market just had its worst day in 18 months, and it's all because of China.
China's stock market struggles might be happening thousands of miles away from U.S. shores, but as today's 358-point drop in the Dow Jones Industrial Average shows, domestic companies could soon be feeling the shockwaves of the ongoing crash.
If you're a large, successful U.S. company in 2015, chances are that you're heavily involved with China. In the last few decades, the country's robust economic growth and growing middle class — combined with softening rules on foreign business operations — have meant big opportunities for companies intrepid enough to develop operations there.
That opportunity, however, carries with it some hefty risk. China's economy and its investment world is not as mature as the U.S., and it looks like the country is about to learn a hard lesson about investment and financial regulation. China's main stock index plunged 8.5% on Monday, a decline that builds on previous drops despite the best efforts of China's government to prop up stock prices.
The stock decline could precipitate a broader economic slowdown in China, leaving U.S. firms without the growth driver they have enjoyed. Let's take a look at a few companies and industries that could be affected.
Apple has few other options for serious growth than the burgeoning Chinese smartphone market. That's what happens when you're already a gigantic and wildly successful company.
Apple has already enjoyed meteoric growth in China, generating $13.2 billion in sales in the most recent quarter. That's more than double revenue generated a year earlier.
That growth will inevitably slow, but broader economic struggles in China could mean that Apple's days of setting revenue records could be numbered. CEO Tim Cook recently touched on these issues, expressing long-term optimism but concern about the current situation.
"Nothing that's happened has changed our fundamental view that China will be Apple's largest market at some point in the future," Cook told an analyst during Apple's most recent earnings call. "It's true, as you point out, that the equity markets have recently been volatile. This could create some speed bumps in the near term."
The name "Yum" might not be familiar, but chances are you've eaten in one of their fast-food chains. Yum operates KFC, Taco Bell, Pizza Hut and a stable of other brands.
Many of those American eateries have found success in China. KFC alone had 4,828 locations in 2014 in the country, according to Yum. It's actually a cultural tradition in China to eat KFC on Christmas day.
Patrons eat at a KFC restaurant in Shanghai, China on 23 November 2010. Yum! brands, the parent company of KFC, is opening up one KFC outlet in China everyday in a race to cash in on the country's explosive growth.
This success has led Yum to generate more than half of its revenue from China. As a result, the company is particularly sensitive to the country's tastes and its economic fortunes.
China's emergence as an economic power has led to it becoming a major factor in both the production and consumption of semiconductors, which are integral to modern electronics.
China "represents the largest and fastest growing country market for U.S. semiconductors," according to a recent report from the Department of Commerce. That means a variety of companies including Intel, Qualcomm, Micron Technologies and Texas Instruments are at risk, all of which rely on greater Asia for more than 50% of their sales.
GE originally had loft goals for China. The company had previously said that it hoped to generate $10 billion per year in the country, but fell rather short of that.
Still, China has become an important market for GE's industrial goods like airplane engines and medical equipment. Asia as a whole is responsible for about 16% of GE's total sales.
Like Apple, Boeing has been boosted by growing demand in China. The airline manufacturer recently raised its 20-year forecast for commercial jet demand thanks to increasingly rosy projections from China.
Such a long-term outlook means that Boeing probably won't be too hurt by any small fluctuations, but a more serious slowdown would mean trouble for the company.
Travel is one area where even short-term problems could spell trouble.
Macau serves as the Las Vegas of China, sitting just off the coast and hosting numerous major resorts and large casinos. The semi-independent island (like Hong Kong, it is a "Special Administrative Region) is a destination around the region.
The island has fallen on hard times. Unlike Vegas, which has become relatively diversified in how it makes money off tourists, Macau is still primarily a gambling haven, although there have been efforts to change that.
Night view of the Sands Macao Casino, owned by the Las Vegas Sands Corporation, in Macao, China, 28 March 2015.
Gambling revenue has already been dropping off, with May 2015 coming in 37% below the same time last year.
Numerous U.S. companies have built operations in Macau, including Las Vegas Sands, Whynn Resorts and MGM resorts. These companies are also involved in ongoing developments, banking on the island's future.
China's stock market struggles could mean less disposable income for trips and gambling. If the market leads to great economic hardship, one only needs to look at Las Vegas's struggles during the financial crisis.