Summary of Key Points
Over the thirty-one years from 1995 to 2026, there has been a transformative change in the number of companies on the Fortune Global 500 list from China, the United States, and Japan: China's number increased from 3 to 122 (including companies from Hong Kong, Macao, and Taiwan), Japan's decreased from 149 to 40, while the United States saw a slight decline (from 151 to 141). This represents not only a change in the number of companies but also a reshuffle of global economic power and industrial structure. China has completed a comprehensive upgrade of its industrial system, although the quality of its companies (in terms of profits, technology, and pricing power) still lags behind that of the United States. Japan's lesson is that missing out on technological revolutions led to the failure of industrial innovation. The key to future competition will be the ability to transform new technologies such as AI and renewable energy into large-scale industries, rather than simply focusing on quantity.
I. China: From 3 to 122 Companies – Not Just a Numbers Game, but a Comprehensive Industrial Development
In 1995, China had only 3 companies on the Fortune Global 500 list (all in traditional sectors: banks, Sinochem, and COFCO). By 2026, the list included 122 companies, ranging from giants like State Grid and PetroChina to internet behemoths such as JD.com, Alibaba, and Tencent, as well as new players in the renewable energy sector like BYD and CATL. This is not about a sudden increase of 119 companies; it indicates that China has built a robust system over 30 years that enables it to produce world-class enterprises in various industries—from energy and finance to the digital economy and new energy vehicles. It's like moving from having only basic necessities like rice, flour, and oil at home to having a variety of products such as smartphones, cars, and e-commerce services, reflecting a true improvement in our industrial capabilities.
II. The Gap Between China and the United States: Close in Number, but 2.5 Times Difference in Profitability
In 2026, the number of Chinese companies on the Fortune Global 500 list (122) is only 19 less than that of the United States (141), but the profit gap is staggering: the average profit of US companies is $11.2 billion, compared to only $4.5 billion for Chinese companies, which is 2.5 times higher. For example, Alphabet (the parent company of Google) earns $132.1 billion annually, while many large Chinese companies have high revenues but lower profits. The reason is that US companies generate profits through technology, brand strength, and global pricing power (such as Apple's iPhones, which are expensive but highly profitable), whereas many Chinese companies still rely on scale and low-price competition. The next step is for Chinese companies to grow larger while also becoming more profitable and gaining control of core technologies.
III. Japan's Lesson: Not an Economic Decline, but Missing the Train of Technological Revolutions
In 1995, the number of Japanese companies on the Fortune Global 500 list was nearly equal to that of the United States (149 vs 151), but now it has dropped to 40. While some attribute this to the Plaza Accord, the deeper issue is that Japan failed to seize new technological trends. For instance, during the PC and internet era, the US produced companies like Microsoft and Google; during the mobile internet era, Amazon and Facebook emerged; and in the new energy vehicle era, Tesla did. Despite Japan's high R&D investment (3.7% of GDP), this investment did not lead to new industries or companies. Existing companies (such as Sony and Panasonic) failed to adapt, resulting in a rapid decline in their numbers. This serves as a warning for China: current strengths (such as traditional manufacturing) may become burdens in the future, and it is essential to actively embrace new technologies like AI and renewable energy.
IV. Future Competition: Not About New Industries Replacing Old Ones, but About New Technologies Transforming Old Ones
The Fortune Global 500 list is ranked based on revenue. Therefore, even if a company has cutting-edge technology, it cannot make it onto the list if its revenue is insufficient. Conversely, traditional companies (such as banks and car manufacturers) can stay on the list by adopting AI and renewable energy to transform themselves. For example, banks can use AI for intelligent risk management, car manufacturers for autonomous driving, and energy companies for renewable energy infrastructure. China's advantage lies in its comprehensive manufacturing system and vast market potential (with a population of 1.4 billion using smartphones and buying cars), while the US has advanced chips and foundational models. In the next decade, the company that can integrate new technologies into traditional industries the fastest will win.
V. The Role of Cities: Not About the Number of Fortune 500 Companies, but About the Ability to Foster the Next Generation of Leaders
In 2026, Beijing had 42 Fortune Global 500 company headquarters, the most of any city in the world. Why? Because Beijing is home to prestigious universities like Tsinghua and Peking University, as well as technology parks like Zhongguancun, along with ample capital and talent. This creates the environment necessary for nurturing companies. Hong Kong, for example, used to provide financing for companies but will soon become a platform for Chinese companies to go global, utilizing its international financial network, legal system, and talent to build brands and sell products overseas. The value of a city lies in its ability to continuously produce new, successful enterprises.
Conclusion
China's rise from 3 to 122 companies on the Fortune Global 500 list is a historic achievement, but the real challenge has just begun: transitioning from being a follower to a leader in terms of company size, quality, and technological prowess. The next phase of competition will focus on which companies can master core technologies, generate high profits, and gain global pricing power. This is the true test of maturity for Chinese businesses.