This year's Fortune Global 500 list was released recently. Overall, China shows strong performance, with 120 Chinese companies making the list, not far behind the 126 from the United States, and far exceeding the 52 from third-place Japan!
The titans remain the same; Walmart continues to top the list with an absolute advantage, followed closely by State Grid of China. The top 10 seats remain dominated by energy and automotive companies, among which China Petrochemical Corporation and China National Petroleum Corporation ranked third and fourth respectively. Berkshire Hathaway, led by Warren Buffett, although dropping two spots, still maintains a conspicuous position at number 10.
From this list, two points are worth noting: first, Walmart has topped the Fortune Global 500 for five consecutive years since 2014; second, the number of Chinese enterprises on the list continues to approach that of the United States.
Since 1995, when the Fortune Global 500 list began covering both industrial and service enterprises, no other country's number of enterprises has grown so rapidly.
In terms of importance, the 500 companies account for approximately 40% of global production, 50% of WorldWay, 60% of international technology trade, and 90% of foreign direct investment. They truly represent a country's economic strength and serve as a nation's most significant economic "business card."
Take Walmart's five-year run at the top of the Fortune Global 500 as an example. Walmart first topped the Fortune 500 in 2002, marking the first time in business history that a service-oriented company achieved the number one position.
American management expert Peter Drucker commented immediately, believing that "the economic power of developed countries is rapidly shifting from manufacturers to distributors and retailers." History proved that Drucker's observation was very astute. From 2002 to 2018, Walmart topped the Fortune 500 a total of 13 times, while the power of the U.S. economy indeed shifted rapidly from manufacturing to the service sector, including retail. The proportion of manufacturing in the U.S. economy has declined to about 12%. Correspondingly, over the past decade or more, U.S. consumption and the U.S. retail industry have seen their business models and power replicated globally.
This shift in economic power is also a major shift in wealth opportunities. Had one foreseen this transition, one would certainly have become a big winner in the global economy over the past 20 years. In fact, looking at the secrets of the global economy over the past two decades, at least two points are worth noting:
First, over the past 20 years, in countries like the U.S., most people who have truly accumulated great wealth did so through innovations in the circulation and commercial sectors rather than manufacturing. The biggest business opportunities lie not in manufacturing, but in distribution. Although this conclusion may be disheartening, it is the true landscape of global wealth; taking this 500 list as an example, the retail industry accounts for about 10% of U.S. entries, while only 4 companies from China made the list.
Second, wealth is always concentrated in the world's most developed cities and urban clusters, and this is true in China as well. China's five major urban clusters account for 11% of the national land area, 40% of the population, and nearly 60% of total GDP. In 2017, 14 cities in China had a total GDP exceeding 1 trillion yuan.
In fact, the wealth cycle currently experienced by the Chinese economy is very similar to the situation in 2002 when Walmart first topped the Fortune Global 500. After undergoing a breakthrough and exploration over the past 10 years, the significant improvement in the status of China's retail industry in the country's economic power map strongly indicates that the map of the Chinese economy has actually shifted from manufacturing to retail and distribution. In particular, with the rise of Chinese consumption, this trend of shifting has shown an obvious acceleration.
The rise of consumption will become the biggest event in the Chinese economy over the next 20 years and is the greatest "windfall" for the Chinese economy. McKinsey previously estimated that by 2025, China's middle class would exceed 800 million people, and they will become an important force in the "new consumption era."
