China overtakes US on Fortune Global 500 list
The new Fortune Global 500 list, published by the magazine this week, sees more China-based companies – including 10 from Taiwan – make the list than those from the US in what Allan Murray, Fortune president and CEO, describes as marking ‘an important world power transition’.
The record number of Chinese companies making the list has hit 129 – up from 120 last year, and overtaking the number of US firms that have made the annual ranking of the world’s largest companies. This year, 121 US companies make the list, down from 126 in 2018.
In an editorial announcing the new list, Murray notes that while the Fortune ranking is based on company size, ‘size is not everything’.
‘Many of the largest Chinese companies are state-owned enterprises (SOEs) that owe their heft to government-supported monopolies in the world’s most populous market, and aren’t necessarily the world’s most dynamic companies,’ he writes. In fact, the percentage of SOEs on the list has grown from 76 percent last year to 80 percent today.
Despite this, the swing to the East is important, Murray adds, stating that ‘the list signals a significant global power shift. Ten years ago, there were only 43 Chinese companies on the list; 20 years ago, there were just eight. And a boatload of fast-growing private Chinese companies are rapidly working their way up the ranks.’
While Walmart holds on to the top spot for the sixth consecutive year – and for the 14th time since 1995 – and Royal Dutch Shell takes the third-place spot, three Chinese SOEs make the top five: Sinopec in second place, China National Petroleum in fourth and State Grid in fifth.
Another notable entry is Saudi Aramco; a newcomer to the list, the Saudi giant enters the rankings in sixth place. Fortune says the firm ‘netted $111 bn in profits, nearly double Apple’s earnings’ and ending the Cupertino, California electronics giant’s three-year reign as the Fortune Global 500’s most profitable company.
Xiaomi, another Chinese firm and a rival smartphone maker, also enters the list for the first time (at number 468), reportedly rewarding its 20,000 employees with 1,000 shares each.