China overtakes U.S. in companies on Fortune Global 500

Business & Technology

China is the new center of giant for-profit enterprises, according to the new Fortune Global 500 ranking published by the eponymous magazine. For the first time since the annual ranking began in 1990, more revenue-leading companies hail from China and Hong Kong than from the U.S.

the cover of the august 2020 fortune magazine, with a graph showing china taking the top ranking starting in 2020
The cover of the newest issue of Fortune Magazine, showing China’s dethroning of the U.S. top spot in the number of revenue-leading companies.

Fortune Magazine has published its annual ranking, which began in 1990, of the world’s top 500 for-profit companies in terms of revenue. For the first time, China (including Hong Kong) leads the U.S. in the number of companies on the list. Fortune Editor-in-Chief Cliff Leaf writes in an accompanying commentary:

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.

The numbers:

  • 124 of the 500 top revenue-generating companies are based in China and Hong Kong (an additional 9 are in Taiwan).
  • 121 of the leading companies are based in the U.S.
  • However, the Chinese companies “underperformed in terms of profitability as reflected in the fact that the listed Chinese companies’ average profit stood at $3.6 billion, nearly half of the average profit registered by the U.S. companies on the list,” Caixin reports, summarizing a commentary by Wang Zhile for the Chinese release of the Global 500 list.

The takeaway: As Fortune writes in an interactive history of its index, “the growing number of companies in China in the Global 500 makes the case that the ‘American Century,’ a phrase Fortune’s founder Henry Luce coined back in 1941, has at last given way to a new reality.”

Related: President Trump repeated a claim today, which he has also previously expressed and which is still widely and incorrectly accepted in Washington, that Hong Kong’s increasing lack of “freedom” means it will be less economically “competitive.”

  • But despite what Washington thinks: “Freedom” is not a necessary condition for economic growth, innovation, or corporate success. It may modulate what kinds of industries you can succeed in, but in terms of raw revenue and economic power and — yes — even innovation, a lack of freedom has not stopped the rise of corporate China. 

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