In a first, China has surpassed the US in having the most Fortune Global 500 companies.
A total of 133 Chinese companies, including those based in Mainland China, Hong Kong and Taiwan, were on the list, compared with 121 ones based in the US, according to the list released Monday.
US-headquartered Walmart once again topped the list, followed by three Chinese state-owned companies—Sinopec Group, State Grid and China National Petroleum.
“Chinese companies outnumbering US ones shows that China’s economy is large enough to cause US concerns,” said Zhang Lin, a Beijing-based independent political economy commentator.
According to Fortune magazine, the Global 500 ranking is based on revenues, and many of the Chinese companies on the list earned their spot not necessarily because of their business dynamism, but because they are state-supported monopolies in the world’s largest market.
“The good thing is that infrastructure and energy companies belong to the field of public utilities, and state-owned monopolies avoid redundant construction and enhances pricing power,” Zhang said. “But the bad thing is that these companies have huge scale, rely on administrative power and policy inclination to form monopolies, and they are different from companies that grow in the market.”
Chinese telecommunications giant Huawei Investment & Holding Co., Ltd. leaped from 61st to 49th on this year’s list, breaking into the top 50 for the first time.
Chinese Internet giant Alibaba Group Holding Ltd. rose from 182 to 132 this year. E-commerce retailer JD.com Inc., internet giant Tencent Holdings Ltd. and smartphone maker Xiaomi Corp. ranked 102nd, 197th and 422nd respectively.
The “big four” state-owned banks: Industrial & Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China, were all on the list, all with little profit change from last year.
The rise of China as a leader of global business has clearly emerged during the past years, Fortune magazine editor-in-chief Clifton Leaf pointed out. “There were precisely zero Global 500 companies based in mainland China in 1990 when we began our survey. Today there are more giant for-profit enterprises there than anywhere else on earth.”
But the overall profit level of Chinese enterprises is still low. The average profit of Chinese enterprises on the list is less than $3.6 billion, about half of that of American enterprises, which is $7 billion, and lower than the average profits of the top 500 companies, which is $4.1 billion, reported by Jiemian.
On the list were 53 companies from Japan, 31 from France, 27 from Germany and 22 from the United Kingdom.
The world’s 500 largest companies generated $33.3 trillion in revenues and $2.1 trillion in profits in 2019. Together, this year’s Fortune Global 500 companies employ 69.9 million people worldwide and are represented by 32 countries, according to Fortune magazine website.
The Fortune 500 rankings have become an important indicator that renowned companies use to measure their own strengths, size and international competitiveness.