Analyzing the Global Top 500 Companies... China Accelerates, Korea Falls Behind

Published 27 Apr.2022 11:00(KST)

[Asia Economy Reporter Jin-ho Kim] The Federation of Korean Industries (hereinafter FKI) analyzed the business performance of Korean, American, Japanese, and Chinese companies included in the Fortune Global 500 over the past five years (2017?2021) and found that Korean companies showed the weakest results.

Over the past five years, Korea ranked last among the four major countries in both revenue and net profit growth rates. The combined revenue of Korean companies in the Global 500 increased from $745.88 billion in 2017 to $804.44 billion in 2021, growing at an average annual rate of 1.9%. This performance lagged behind China (10.3%), the United States (3.3%), and Japan (2.1%) during the same period.

Net profit declined from $41.84 billion in 2017 to $40.34 billion in 2021, showing an average annual negative growth rate of 0.9%. This decrease was larger than that of the United States (-0.7%) and contrasted with the positive growth rates recorded by China (10.9%) and Japan (5.4%) during the same period.

China ranked first among the four countries in both revenue growth rate (10.3%) and net profit growth rate (10.9%), demonstrating the strongest business performance among global large corporations over the past five years. In terms of the number of global companies, China also ranked first among the four countries. The number of Chinese companies included in the Fortune Global 500 increased by 26, from 109 in 2017 to 135 in 2021.

When the Global 500 companies were divided into 20 industries, the number of China’s world-leading companies by industry (based on revenue) increased from 3 in 2017 to 6 in 2021, an increase of 3. In contrast, the number of U.S. world-leading companies by industry decreased from 12 to 8 during the same period. Korea had no world-leading companies by industry.

The FKI pointed out that Korean companies’ research and development (R&D) investment scale was relatively insufficient after analyzing the gap between Korean companies and world-leading companies in the same industries among the Global 500 companies.

Choo Kwang-ho, head of the FKI Economic Headquarters, stated, “The management indicators of Korea’s representative companies are weaker compared to major countries, and Chinese companies, which are export competitors, are rapidly emerging, which could weaken corporate competitiveness on the global stage.” He emphasized, “We need to expand R&D support and assist in discovering new industries so that our companies can secure next-generation growth engines, and improve and ease excessive regulations to create an environment where they can compete fairly with foreign companies.”