In 2023 China lost the top spot on the list of countries whose companies populate the Fortune Global 500 list, a position it had held since toppling the USA in 2019. Is this an inflection point or will the US (one core at the top) and China exchange the position as they struggle for global economic domination in the decades ahead? This article presents six reasons for believing that China is unlikely to recover the top spot and suggests ways in which US, European, and Japanese firms can exploit China’s fundamental weaknesses in the years ahead.
In 2019, we predicted that China would likely account for more companies on the Fortune Global 500 list than any other country. That seemed like a bold prediction at the time, given that American firms had held the number one position since the list’s inception in 1995 and the U.S. economy was 50% larger than China’s. But just one year later, in 2020, China did indeed top the list, with its 124 firms edging out the U.S. at 121 (see here for the Fortune Global 500 data).