China Has Now Risen to Fifth Place in Fortune’s World Rankings
Chinese Companies Race To New Highs
It’s more bad news for the U.S. as the latest Fortune 500 global ranking hits the wires. The number of U.S. companies in the top 500 has fallen to just 140. That is the lowest number since Fortune began the list more than fifteen years ago.
As America hit new lows, Chinese companies raced to new highs. An all-time record number of Chinese companies appears in the 2009 Fortune 500 list of top global companies.
For the first time, a giant Chinese company, no stranger to China Stock Digest subscribers, has hit the top ten. Oil giant Sinopec, or China Petroleum & Chemical Corp. (SNP) refines and distributes about 80% of China’s fuel. China’s appetite for fuel continues to grow as the nation surpasses the U.S. to become the world’s largest car market.
Overall, China had an unprecedented total of thirty-seven companies featured on the list, with nine new entries and the others climbing in the rankings. The new entrants to the global Fortune 500 were, in descending order, Jardine Matheson, CITIC Group, China Unicom, China Huaneng Group, Aviation Industry Corp. of China, China South Industries, Jiangsu Shagang Group, Bank of Communications and the Aluminum Corporation of China.
China has now risen to fifth place in Fortune’s world rankings. Japan was second with 68 companies, while France with forty entries and Germany with thirty-nine narrowly edged out China. Of course, the economies of Germany and France do not rank high on many investors’ lists of growth prospects.
As a growth economy, China continues to outpace the world. In announcing the rankings, Fortune noted a U.S. National Intelligence Council report called Global Trends 2025 that said if the current trends continue, “By 2025 China will have the world’s second largest economy.”
According to a 2008 study by the U.S. research organization Carnegie Endowment for International Peace, China’s economy would overtake that of the U.S. by 2035 and be twice its size by mid-century.
Of course those rankings are based on dollar values. They do not reflect the measure of world economic growth used by the CIA and favored by the China Stock Digest, the PPP.
PPP measures purchasing power parity, a system which ignores currency fluctuations and gauges how rich a country is according to the relative purchasing power of it people. The simple fact that China has risen to become the world’s largest auto market is an indication that China’s real rise in wealth is not reflected by its currency.
China is already the world’s number two economy according to the CIA, and rising fast.
As GM tumbled out of the Fortune 500 list, this iconic American company acknowledged that China was its greatest growth engine.
For growth investors, the epicenter of the world is shifting unstoppably to Chinese shores. That’s one reason our model portfolio is moving forward as the Dow’s month of declines drags on.
“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.” ~Warren Buffett
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Editor in Chief
China Stock Digest
P.S. If you want a first hand look into the fast growing world economy – China, don’t forget about the 2009 China Investors Field Trip – http://www.chinainvestorsfieldtrip.com