Changing Fortune 500
July 12th 2008 10:21
Goodbye Nike, hello China
Hello China indeed. Our heading summarises the 2008 Fortune 500 list, released last Thursday. The iconic sports shoe maker and eight other American companies fell off the list of the world's top 500 companies measured by revenue, cutting the American presence from 162 in 2007 to 153.
Japan provided 64 companies, France 39, Germany 37 and Britain 34.
Splitting the last two, with 35 companies, was greater China. With 26 mainland firms, six from Taiwan and three from Hong Kong, the Chinese presence was the biggest ever, and who can doubt that there is plenty more to come?
Before polishing off the crystal ball and having a peep at the future, it is interesting to have a look at the road, at times rocky and even harsh, which has led to a present where tens if not hundreds of millions of Chinese are wearing expensive western clothes and carrying expensive mobile phones in their designer pockets, and a future where it seems a question of when, not whether, China will take over as the world's economic super power.
Some people argue that China became the world's biggest economy years ago. This is because statistics, as we all know, can tell the same story in different ways. In simple terms, it can be misleading to say the average American earns, say, 10 times as much as the average Chinese, because that average Chinese wage has, in China, a much higher value than one-tenth the American wage. If we adjust the average wage figures to reflect local purchasing power, and if we then multiply our new average wage figures by the respective population of the two countries, it is easy to see how China can be said to be the world's biggest economy.
While it still has a little way to go in real terms, as the economists say, it interesting to consider that China has been the fastest-growing economy in the world for the past 25 years. Average gross domestic product growth in that time has been an astounding 10 per cent. Income levels have grown at 8 per cent per year for the past 30 years, and a 2005 United Nations report said China had lifted 250 million people out of poverty since 1980. Today, new millionaires in US$ terms are popping up all over the place.
It is not all good news, of course. Income disparity - the gap between the rich and the poor - is growing quickly and has been recognised by authoritative voices both inside and outside the country as a major problem. Some predict consequent social unrest unless the Chinese authorities find a way of reversing the trend.
The sheer scope of the Chinese economic revolution could have global consequences. In 2006, renowned American environmentalist Dr Lester Brown warned that China's growing prosperity in China threatened to place "intolerable" burdens on the world's natural resources.
Dr Brown bluntly claimed that, unless the world economy was fundamentally restructured, it would be unable to produce enough energy, food and other resources to meet Chinese demand.
Is this the future? Dr Brown said that, if it continued to grow at its current pace, China would by 2031 have a population of 1.4 billion, would burn 99 million barrels of oil a day (18 per cent more than is now produced globally), consume two-thirds of the world's current grain harvest, use twice as much paper as the world currently produces, and drive 1.1 billion cars, more than the world's 2005 fleet of 800 million, forcing it to pave roads and car parks equal to the area it now plants in rice.
"There go the world's forests," said Dr Brown
Is that the future? Our crystal ball has thrown hands over eyes and hidden itself under the pillow.
Footnote: For a full list of the 2008 Fortune 500, go to this link.
Hello China indeed. Our heading summarises the 2008 Fortune 500 list, released last Thursday. The iconic sports shoe maker and eight other American companies fell off the list of the world's top 500 companies measured by revenue, cutting the American presence from 162 in 2007 to 153.
Japan provided 64 companies, France 39, Germany 37 and Britain 34.
Splitting the last two, with 35 companies, was greater China. With 26 mainland firms, six from Taiwan and three from Hong Kong, the Chinese presence was the biggest ever, and who can doubt that there is plenty more to come?
Before polishing off the crystal ball and having a peep at the future, it is interesting to have a look at the road, at times rocky and even harsh, which has led to a present where tens if not hundreds of millions of Chinese are wearing expensive western clothes and carrying expensive mobile phones in their designer pockets, and a future where it seems a question of when, not whether, China will take over as the world's economic super power.
Some people argue that China became the world's biggest economy years ago. This is because statistics, as we all know, can tell the same story in different ways. In simple terms, it can be misleading to say the average American earns, say, 10 times as much as the average Chinese, because that average Chinese wage has, in China, a much higher value than one-tenth the American wage. If we adjust the average wage figures to reflect local purchasing power, and if we then multiply our new average wage figures by the respective population of the two countries, it is easy to see how China can be said to be the world's biggest economy.
While it still has a little way to go in real terms, as the economists say, it interesting to consider that China has been the fastest-growing economy in the world for the past 25 years. Average gross domestic product growth in that time has been an astounding 10 per cent. Income levels have grown at 8 per cent per year for the past 30 years, and a 2005 United Nations report said China had lifted 250 million people out of poverty since 1980. Today, new millionaires in US$ terms are popping up all over the place.
It is not all good news, of course. Income disparity - the gap between the rich and the poor - is growing quickly and has been recognised by authoritative voices both inside and outside the country as a major problem. Some predict consequent social unrest unless the Chinese authorities find a way of reversing the trend.
The sheer scope of the Chinese economic revolution could have global consequences. In 2006, renowned American environmentalist Dr Lester Brown warned that China's growing prosperity in China threatened to place "intolerable" burdens on the world's natural resources.
Dr Brown bluntly claimed that, unless the world economy was fundamentally restructured, it would be unable to produce enough energy, food and other resources to meet Chinese demand.
Is this the future? Dr Brown said that, if it continued to grow at its current pace, China would by 2031 have a population of 1.4 billion, would burn 99 million barrels of oil a day (18 per cent more than is now produced globally), consume two-thirds of the world's current grain harvest, use twice as much paper as the world currently produces, and drive 1.1 billion cars, more than the world's 2005 fleet of 800 million, forcing it to pave roads and car parks equal to the area it now plants in rice.
"There go the world's forests," said Dr Brown
Is that the future? Our crystal ball has thrown hands over eyes and hidden itself under the pillow.
Footnote: For a full list of the 2008 Fortune 500, go to this link.
Sources: China Daily, cnn.com, wikipedia.com
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