Based on the data of this list, people can understand the latest development trend of the worlds largest enterprises. Through the vertical comparison of different years and different industries, people can not only understand the rise and fall of enterprises, but also understand the changes of the companys operating quality such as the rate of return on sales, the rate of return on net assets, and the total production efficiency. At the same time, in-depth study of countries or regions can reveal the changes in the distribution of large enterprise groups.
After the international financial crisis in 2008, the operating conditions of these large companies fell into a trough. The biggest subsequent shift occurred in 2018, when year-on-year increases in revenue and profits were close to 9% and 15%, respectively. On this basis, the Fortune Global 500s revenue will continue to grow by 2% year-on-year in 2019; however, the total profits of these companies last year amounted to $2 trillion, a year-on-year decrease of more than 4%.
Wal Mart has become the worlds largest company for the seventh consecutive year, Sinopec still ranks second, State Grid rises to third, PetroChina ranks fourth, and shell oil drops to fifth.
Since the reform and opening up, the scale of Chinese enterprises and the number of large companies have been increasing, which is the result of the development of Chinas overall economic scale. In 1995, the World Trade Organization (WTO) was just established when fortune magazine first published the list of the worlds top 500. China has begun to deepen reform and expand its opening up. By 1997, only four enterprises in Chinese mainland had entered the list. In 2001, China joined the world trade organization, and 12 Chinese enterprises entered the ranking list in that year, and then increased rapidly year by year.
Since 2008, the number of Chinese enterprises in the list has accelerated. First it surpassed Germany, France and Britain, and then Japan. In this years ranking, Chinese mainland enterprises surpassed the US, and the number of enterprises listed on the list ranked first.
Since fortune released the list of the worlds top 500 companies in 1995, the number of enterprises in no other country or region has increased so rapidly.
There are 25 new and re listed companies in the Fortune Global 500 list this year. Among them, 8 Chinese companies are newly listed. They are: Shanghai Construction Engineering, Shenzhen investment holding, Shenghong, Shandong steel, Shanghai pharmaceutical, Guangxi investment, China Nuclear Industry and China coal energy source.
However, the profit level of Chinese enterprises is low. In 2019, the average profit of 124 Chinese mainland enterprises was less than 3 billion 600 million US dollars, about half of us enterprises (7 billion US dollars), and also less than the average profit of 500 large companies in the world, which was US $4 billion 100 million. Based on these three data, the average sales return rate of Chinese mainland companies was 5.4%, lower than that of American enterprises, and the average return on assets was 9.8%, lower than that of American enterprises by 17%.
If we take into account the differences in the average number of employees employed by Chinese and US listed companies, the gap will be further widened.
This year, Chinas Bank has entered the list of 10, and the profits of the 10 banks account for 44% of the total profits of Chinese mainland enterprises. Compared with more than 50% in previous years, the profit share of the listed banks has decreased significantly, but the proportion is still too high. However, if the banks profit is too high, it will inevitably squeeze the profits of non-financial enterprises. If we do not calculate the profits of banks, the average profits of 114 non bank enterprises listed on Chinese mainland in 2019 will be only about US $2 billion 200 million. In contrast, the average profits of 113 US Non Bank companies reached 6 billion 300 million US dollars, 3 times that of Chinese mainland enterprises.
As we have summed up in previous years: in the past 40 years of reform and opening up, Chinese enterprises have grown from scratch in the first 20 years; since Chinas accession to the WTO, Chinas modern enterprises have grown from small to large. So, this years Chinese enterprises are facing a new challenge, how to change from big to really strong? This is why Chinese leaders proposed in 2017 to cultivate world-class enterprises with global competitiveness.
In this analysis, the author Wang Zhile analyzes the problems and gaps of Chinese companies from the perspective of global competitiveness and soft power based on his years of investigation and Research on global enterprises. And through the study of transnational index, it reveals the real secret of global companies to form super global competitiveness, and points out the direction for Chinese big companies.
In addition, Lloyds jumped to the top of the roe list, while Hengli Group, Taikang Insurance, Castle Peak holdings, country garden and China Life Insurance ranked top among Chinese companies.
In the profit margin list, TSMC ranked the highest, Berkshire Hathaway ranked second, and Pfizers profit margin increased significantly year on year, ranking third. Alibaba ranks fifth with a profit margin of nearly 29%.
In terms of ranking changes, Prudential Group has risen 292 places this year. It is worth mentioning that six of the top ten companies that have jumped the fastest in the rankings are insurance companies. The two fastest-growing companies in China are also in the insurance industry, namely, AIA (up 138) and Cathay Pacific Financial Holdings (81).
For comparison, there are seven Internet related companies on the list this year, namely Amazon, alphabet and Facebook in the United States, as well as Jingdong group, Alibaba group, Tencent Holdings Limited and Xiaomi group from China. The ranking of these big Internet companies in China and the United States has improved compared with last year. Among them, the largest increase in ranking is Alibaba, up 50 places.