The Fortune Global 500 list is out today. One thing I want to highlight is an ongoing (and perhaps accelerating) economic shift in power.
This is the first time in the list’s history that the number of companies based in China, including the 10 in Taiwan, reached a record 129, exceeding the number of companies based in the U.S. (121). Ten years ago, there were only 43 Chinese companies on the list. Twenty years ago, there were just eight.
Fortune’s Geoff Colvin wrote an essay titled, It’s China’s World, in which he further explains what it means for business now that China has reached parity with the U.S. on the Fortune Global 500. He writes:
That shift is transforming not just the business world but the whole world. As China seeks to succeed the U.S. as the preeminent superpower, business is playing an even larger role in international affairs than usual.
Nations have always competed economically, but the U.S. and China are engaged in direct battle over the world’s economic life force: technology. As former Treasury Secretary Henry Paulson has written, “The battle is about whose economy will drive the technology of the future and set the standards for it.”
The first question I asked a panel of venture capitalists at Fortune’s Brainstorm Tech last week was around the economic power shift from the United States to Asia. Although the panelists largely downplayed its significance, the numbers speak for themselves. Global investors are pouring increasing amounts of capital into China’s startup ecosystem, with 29.4% of global VC directed into Chinese startups in 2018, according to Pitchbook.
Although many of the largest Chinese companies are state-owned enterprises, of course that capital is trickling down into the private markets. Just take a look at Fortune’s newly-published feature on China’s biggest private sector company Ping An.
Ping An (No. 29 on the Fortune Global 500) earmarks 1% of revenue for investments in innovation. Over the past 10 years, the group has plowed more than $7 billion into research and development, and its founder and CEO Peter Ma has vowed to invest $15 billion more in the decade to come.
That endowment has nurtured 11 technology affiliates, of which two—Good Doctor and Autohome, a platform for car buyers—are publicly traded and three are privately held “unicorns” with multibillion-dollar valuations. For now, only two of those five are profitable. Even so, the combined value of the group’s tech ventures tops $70 billion.
As Colvin put it in his column: Fortune’s founder, Henry Luce, famously declared in 1941 that the 20th century was the American Century. Whether the 21st century becomes the Chinese Century in the full sense remains to be seen. But at least in business, the Chinese Century is growing intensely more Chinese, and faster every day.
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