The Fortune 500 List is Out. You Should Care About That


Some Really Interesting Trends Merit Our Attention, America

The Times, They Are A-Changing

Every year, Fortune magazine comes out with a list of the world’s top 500 corporations, with accompanying analysis and articles.

I don’t know the detailed history, but I would feel safe in betting that for many, many years, that list was about 90% American companies. More on why that is important later. For now, just note that there is a lot more diversity on the list – and another giant.

It was inevitable that American dominance of that list would decline. But the rate of acceleration of that change is something else. Today, America still has the most entries on the list, but that is only about 24% of the total. 121 of the 500 countries are US based. Here is the eye catcher: China is second, with 119 companies.

That’s right, only two companies account for the difference in our two national lists.To show what rarified air this level represents, the third ranking county is Japan, with only 52 countries. The US and China account for 240 of the 500 countries, in about an even split.

America’s decline in dominance and influence is more pronounced the higher one goes on the list.

o Of the top 10 companies, only two are American. Three are Chinese. The rest are scattered around the globe.

o Of the top 20, the US presence grows a bit, with 9 on the list.

Why Should We Care?

Companies are more international than national these days, and few are exactly well known for caring about their customers. Actually, this matters for two reasons.

One, having a dominantly large proportion of the world’s economic giants in the private sector yields influence to the US (or China) in countless forums and ways. This is reserve soft power that counts every day.

Two, the world craves stability, especially in finance and economics. Having a dominant corporate sector, and a dominant currency, take a lot of risk out of global decision making for everyone. That stability is increasingly at risk. That risk increases in no small part due to the policies and conduct of the Trump administration. But that is another blog.

At the end of the day, a good case can be made that the US is better off, and the world is better off, when our economic and financial status stands tall. Trump’s rejection of multilateral deals in favor of bilateral arrangements and his failure to use the WTO in his fight with China erode US influence. The Chinese and others are simply learning to work around us. We are dramatically less important and influential now than we were three years ago.

The China Story is Quite Different

China has taken a global, long-range view. The results are clear, and not only with the growth of companies. China began major overseas investments years ago. They made choices that secured long-range capacity and influence. They did so even if incurring short term financial loss.

I first saw this is Panama some years ago. The Chinese effectively run global shipping in Panama now (Remember the Panama Canal? It is still important). Today, China has a major stake in 4 of Europe’s six major ports (100% stakes in two of these four). Their share of ownership in the other two ranges from 20-40%. You don’t have to be brilliant to conceive of the economic, political, and intelligence value of this.

China is establishing itself as a major infrastructure player globally with its Belt and Road Initiative. This is a new global version of the Silk Road, to the tune of $1 Trillion. Even in outer space, China’s investment outpaces Russia’s and is not far behind the combined investments of Europe.

Bottom Line

We enjoy great influence in setting the international agenda as a result of our economic power. This affects the daily lives of us all. Current policies are rapidly eroding that position and wasting the attendant opportunities. Our principle economic competitor is patient, determined, and in for the long term.

Think you have no interest in international business and fiancé? Wait until China start calling the shots. A challenge Joe Biden, by the way, seems to underestimate. It would be interesting to hear all the candidates talk about this.

      Bill Clontz

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