Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

The Global Rise of Chinese Corporate Giants

Companies / China Stocks Nov 27, 2017 - 05:32 AM GMT

By: Dan_Steinbock

Companies Only a decade ago, Chinese companies accounted for barely 1 percent of the world’s largest companies and multinationals. Today, their share has grown by more than tenfold.

After mid-November, Alibaba again won the highest ecommerce sales day in history on China’s Singles’ Day beating last year’s record by almost 40 percent – hitting some $25.4 billion. 

In the United States, the 2016 combined Black Friday and Cyber Monday sales amounted to $6.5 billion, while Amazon’s 2017 Prime Day sales rose to $600 million to $1 billion range. Even combined, all of these revenues account for less than one-third of Alibaba’s Singles’ Day sales.


In one decade, Chinese companies have captured a significant chunk of global competition, thanks to Chinese infrastructure development, savings, rising middle-class – and increasingly global sales.

Corporate behemoths in history

The British multinationals were at the peak of their power in 1914, when they controlled half of the world’s stock of outward foreign direct investment (FDI).

After World War II, US multinationals were positioned to take advantage of post-war reconstruction, transfer of new technologies, and leverage of management capabilities. Their power peaked in the late 1960s, when they dominated half of the world FDI. Coming from a large and integrated economy, the rise of U.S. multinationals – from General Electric and Procter & Gamble to Intel – was often driven by internationalization, based on technological and managerial innovations.

After postwar reconstruction, European multinationals resurfaced. Coming from a continent of diverse economies, their expansion was driven by responsive national strategies, from Unilever to Philips and Ericsson. By the 1960s, British, French and German multinationals began to challenge U.S. multinationals in some sectors.

Starting in the late 1960s,Japanese challengers began to capture increasing market share from cars to consumer electronics, across industries. They benefited from falling trade barriers, improved transport and communications, and increasingly homogeneous markets.  

Coming from a unified island-nation, Japanese multinationals – from Matsushita and Toyota to Sony – excelled in global scale efficiencies. The peak of their power occurred in 1990, when they controlled about a tenth of the stock of foreign investment worldwide.

The rise of Chinese multinationals

Since the 1980s, globalization has contributed to the rise of large emerging economies. Unlike corporate giants from advanced economies, aspiring Chinese companies have had to cope with competition that is increasingly global, capital-intensive, and innovative.

From Haier and Lenovo to Huawei and Tencent – not to speak about the Chinese giants in banking and insurance, construction, utility, automotive, oil and engineering – the pioneering Chinese corporate behemoths often benefit from cost advantages that are beyond the reach of their current rivals.

Before the global crisis, advanced economies – US (16%), Europe (49%) and Japan (4%) – accounted for more than two-thirds of all outward foreign direct investment (FDI) worldwide. In contrast, China’s share was barely 1 percent.

Today, advanced economies – US (21%), EU (32%), Japan (10%) - continue to dominate almost two thirds of total outward FDI. However, the share of China has grown more than tenfold to 13 percent of the total. That’s a dramatic increase in just a decade (Figure 1)

Figure 1       Global 500, 2015

Source: Data from FT Global 500

The rise of Chinese corporate giants

The same goes for the rankings of the world’s largest companies, as measured by market value.

At the eve of the global financial crisis, advanced economies – US (16%), EU (49%) and Japan (4%) – still dominated more than two thirds of the market value of the world’s 500 leading corporations. In contrast, the share of Chinese companies was barely 1 percent.

Barely half a decade after the global crisis and the European credit crisis, advanced economies – US (21%), EU (32%), Japan (10%) – still had almost two-thirds of the total. However, the share of Chinese companies had soared more than ten-fold (11%) (Figure2).

This, however, is just the beginning. As global R&D hubs broaden in China and the role of the mainland’s multinationals spreads worldwide, Chinese companies will begin to compete for global leadership – while paving way for the rise of other corporate giants from large emerging economies.

Figure 2       Outward FDI Flows, 2016

Source: UNCTAD

Dr Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more information, see http://www.differencegroup.net/

© 2017 Copyright Dan Steinbock - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in