A Change in Fortune: U.S. Firms Overtake China’s in Fortune Global 500

Trustee Chair in Chinese Business and Economics  >  Trustee China Hand

With the excitement of the Olympics this summer, one might have missed another competition where the United States and China vied for the highest spot on the podium—the release of the latest Fortune Global 500. This annual list ranks global corporate heavyweights of countries around the world by revenue. In this year’s contest, the United States has retaken the top spot with 139 companies versus China’s 128 (Figure 1). The Trustee Chair in Chinese Business and Economics has followed China’s ascent to the top ranks of Fortune’s list since 2020, when Chinese firms first overtook their American counterparts.

By 2022, our analysis showed that Chinese firms were exponentially increasing their lead with 136 firms to the United States’ 124, much more than China’s lead of three in 2020. This trend has reversed for the 2024 rankings. At the same time, the weaknesses of many Chinese firms that make the list have persisted, as China’s state-owned enterprises (SOEs) continue to perform worse than their peers in the rest of the world and China’s private sector. 

Our third entry in this series of Fortune’s Global 500 is about more than bragging rights. The ranking and accompanying profitability data highlight the size and growth of China’s economy, the country’s struggle to balance state control with market forces, and the aftermath of global pandemic-era economic trends. The list adds credence to observations about China’s economic downturn from another perspective and provides visibility to the growth of sectors that previously didn’t make it into the rankings.

Figure 1: Fortune Global 500 Companies

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When Elephants Fight

The top countries with the most companies on Fortune’s list have remained identical since our analysis began in 2020, with Japan consistently ranking as a distant third. Japan’s total has steadily decreased from 53 firms in 2020 to 40 in 2024 (Figure 1). Germany, France, and Britain have remained relatively consistent, albeit with a slight downward trend since China overtook those three in 2010.  

In Figure 2 we see that the United States and China tower above the next four countries in total revenue, with $13.8 trillion and $10.6 trillion respectively. This number varies year to year due to changes in the number of companies that make the list, but U.S. companies have scored the highest in revenue for the last four years. Even in 2022, when China had 12 more firms, the United States had $0.2T more in total revenue.

Figure 2 also demonstrates that Chinese and American firms dominate the count of total assets. China is the consistent leader in this category. Despite having eight fewer companies on this year’s list, Chinese firms own $1.3T more assets than in 2022 ($48.8T). American assets have also grown by $3.8T, explained by the addition of fifteen more U.S. firms. Listed firms in both countries separately have more assets than the next four countries combined, totaling $41.7T.

Figure 2: Total Revenue and Assets of Fortune Global 500 Firms (2024)

$USD, Trillions

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Post-Pandemic Profit Withdrawals

2022 was a banner year for corporate profits, despite, or because of, the Covid-19 pandemic. Almost every country improved their profit margin from 2020 to 2022. American firms, for example, went from an average of 8.9% to 11.3% and moved back to 8.6% in 2024. Japan improved from 2.7% in 2020 to 5.3% in 2022 and maintained that level in 2024. Figure 3 shows the average profit margins for this year’s top ten Global 500 countries, and most have returned to pre-pandemic profit margins. The average amount of listed countries was 5.33% in 2020 and 6.32% in 2024. Remarkably, in 2022 the average was 7.97%.

Profit margin is a profitability percentage calculated by net profits over revenue. U.S. Global 500 firms generated $1.19T in profit (8.6% of $13.8T), and China’s earned $0.42T (4% of $10.6T).

China is the only major country to maintain a downward trajectory in profit margin performance—4.5% in 2020, 4.4% in 2022, and 4% in 2024. Only Japan and Switzerland exhibited growth in profitability from 2022 to 2024.

Figure 3: Average Profit Margin of Top Ten Countries (2024)

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The Tools at Their Disposal

Figure 4 shows an equally unfavorable trend in China’s return on assets (ROA). Despite owning more assets than any other Fortune-ranked country, Chinese firms get the least value from them. 

Unproductive use of assets can contribute to unpaid loans and failed investments, which becomes a major concern when the debt is owed to local governments. 

At 1.9% ROA, Chinese firms, taken together, have failed to improve the efficiency with which they profit off their assets since 2020, when their average ROA was also 1.9%. The United States has been at the top of the Global 500’s ROA leaderboards since 2020 and improved from 4.9% to 6.2% in that time. Every top ten country saw improved ROA in 2022, and most (except Germany and China) have kept some momentum without dropping back to their 2020 figures. The average ROA of the top ten went from 2.51% in 2020 to 3.99% in 2022 and sits at 3.39% in 2024. Despite global trends, Chinese firms couldn’t improve in this performance metric either.  

Figure 4: Average Return on Assets of Top Ten Countries (2024)

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State-Led Sectors Slow Things Down

To understand why China can amass more total revenue and assets than most other countries but fall short in genuinely important performance metrics, we need to understand the makeup of Chinese firms in the Fortune Global 500. 70.3% of Chinese firms listed are SOEs. These firms account for 78.2% of the revenue and 88.6% of Chinese assets (Figure 5). This breakdown is only slightly different than our 2020 and 2022 analyses.

As in previous years, our classification of SOEs differs slightly from Fortune. We consider any company with more than 25% state ownership to be counted as an SOE. This increased our count by nine firms over Fortune’s, which classifies companies with at least 50% state ownership as SOEs. 

Figure 5: Chinese Companies in Fortune Global 500 by Ownership (2024)

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Figure 6 demonstrates that Chinese private firms are much more efficient. SOEs have profit margins averaging 3.7% and ROAs of 1.2%, while the comparable figures for private firms are 4.9% and 3.3% respectively. The non-state profitability rates are much closer to those of other countries ranked by Fortune.

Figure 6: Average Profit Margin and Return on Assets of Chinese Firms (2024)

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SOE performance metrics have been underwhelming since our analysis began in 2020 when their profit margin was 3.5% and the ROA was 1.2%—nearly the same as today. The downward trending metrics for the private firms are more concerning. In 2020, China’s Global 500 private firms’ average profit margin was 7%, and their average ROA was 3.7%. This is possibly a symptom of China’s stubborn consumer confidence, which has not rebounded to pre-pandemic levels. Or perhaps it’s a side effect of low investor confidence, meaning firms have less capital and a weaker risk appetite. It’s likely a combination of both, which are equally depressed by the struggling property sector. From these historical profitability metrics, we can glimpse the impact of China’s injured post-pandemic economy.

The picture becomes even clearer when comparing the ROA of SOEs and private firms by industry (see Figure 7). Nine sectors have both private and public Chinese firms in the Global 500. One can see how efficiently private firms are able to utilize their assets in high-growth areas. Private engineering and construction firms perform ten times more efficiently than SOEs. In the sectors where SOEs come out on top, the sample of private firms is quite small, and it’s difficult to reach a definitive conclusion. For example, only one of the seven wholesalers that made the Global 500 is a private firm.

Electric vehicles (EVs) and their parts makers are a well-documented bright spot for China's economy. It’s a sector that the Trustee Chair closely follows. In 2022, state-run motor vehicles and parts firms outperformed private firms with an ROA of 1.9% versus 1.6%. But by 2024, the private sector had bounced back, improving their average ROA to 3.1%, while that of SOEs declined to 1.1%. 

Figure 7: Average Return on Assets Comparison by Sector (2024)

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Regionally Concentrated Sectors and Assets

The distribution of sectors represented by Chinese firms has stayed largely the same since 2020, with no consequential shifts in 2024 (Figure 8). Financial and energy firms fell about 5%, and companies in the motor vehicles and parts, engineering and construction, and materials sectors have each grown a few percentage points. 

Figure 8: Sectoral Distribution of Chinese Companies by Number of Firms (2024)

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Likewise, asset distribution among China’s Global 500 firms is nearly identical. Financial firms still account for 71.4% of China’s assets (Figure 9), of which 70.8% of those firms are state-owned.

Figure 9: Sectoral Distribution of Chinese Companies by Assets (2024)

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Consistent with the observations so far, it should be no surprise that Beijing hosts the most companies represented (Figure 10) and dominates the total share of assets (Figure 11). 

Figure 10: Regional Distribution of Chinese Companies by Numbers (2024)

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Fifty companies out of the 128 Chinese Fortune Global 500 firms are based in the Chinese capital (39%), of which forty-four are SOEs. 

Figure 11: Regional Distribution of Chinese Companies by Assets (2024)

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This year's Fortune Global 500 has indicated that China’s falling rank is caused by the weight of underperforming SOEs.

Company Spotlights: Comparing SOEs and Private Firms in the Auto Sector  

#93 SAIC Motor (SOE) 

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SAIC

Founded in 1997, SAIC is the largest state-owned automaker in China and has been among the top 100 companies on the Fortune 500 list since 2014. In 2024, SAIC’s rank dropped to #93, marking its worst performance in five years and its fifth consecutive year of decline since the Trustee Chair began tracking China’s presence on the Global 500 in 2020 when SAIC was ranked #52. 

SAIC’s declining rank is mirrored by the company’s struggling ROA and profit margin—both of which are at their lowest levels since 2020. The reasons behind SAIC’s decline are mixed but include intensifying domestic market competition and new regulatory hurdles in foreign markets. On EVs, SAIC is facing stiff competition from BYD, which is gaining an increasingly large market share domestically, and from innovative startups like Li Auto and NIO. 

In recent years, SAIC has made inroads outside of China, particularly thanks to its MG brand—originally a British company. In 2023, SAIC sold over 1.2 million units across Europe, the Americas, the Middle East, and Southeast Asia, including EVs and internal combustion engine vehicles. Yet, SAIC is facing pushback in Europe, one of the main export markets for its MG EVs. The EU has recently proposed 36.3% anti-subsidy duties on SAIC EVs, significantly higher than the rate proposed for BYD and Geely products. Although there is still uncertainty over the final rates, the tariffs have been approved by the EU, and SAIC's ability to compete in the European market is in jeopardy. 

#143 BYD (Private) 

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BYD

First entering the Fortune 500 in 2022 at #436, BYD has rapidly climbed up the ranks in the past three years. In 2024, the EV giant ranks #143, the second highest-ranking Chinese automaker behind SAIC. BYD’s rise in the Fortune 500 is on par with its emergence in the global EV market, where it is now one of the biggest players. 

Compared to state-owned automaker SAIC, the publicly traded BYD has better performance in profit margin (4.99%) and ROA (4.43%), outpacing SAIC’s 1.4% and 1.9%. The BYD-SAIC comparison is an example of a private firm that outperforms its state-owned competitor in profitability and efficiency. BYD also performs better than many of its privately owned competitors thanks to its highly vertically integrated company structure.

From January to August 2024, BYD dominated the Chinese EV market with a near-37% share of the domestic EV market, outcompeting Tesla (6.95%), and Geely (7.2%). BYD’s success is not confined to their home market. In 2023, BYD led EV sales globally, delivering 3 million units—Tesla sold 1.8 million.  

#250 CATL (Private)

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CATL

Founded in 2011, Chinese battery maker CATL has established itself as a global battery powerhouse, with a current market cap of $112 billion five times its value in 2019. It is now the 140th most valuable company in the world. 

CATL took more time than SAIC and BYD to join the Fortune 500 list, debuting at #292 in 2023 and climbing to #250. The company’s revenue increased by 15.9% from $48.85 billion in 2023 to $56.63 billion in 2024, driven by its sustained leadership in the battery sector against the backdrop of an expanding global EV market. As of the first half of 2024, CATL dominates the global battery market with a 37.8% share, followed by China’s BYD (15.8%) and South Korea’s LG Energy Solution (12.9%). 

Like leading firms in many of the country’s priority sectors, CATL has benefited from state funding and policies. According to their 2023 annual report, CATL has received over $1.6 billion in state subsidies since 2020, with $800 million in 2023 alone. CATL has achieved success in domestic and international markets, forging partnerships and supplying local automakers like SAIC, Nio, and Geely, as well as global carmakers such as BMW, VW, Hyundai, and Honda. To serve its international clients, the company has already opened one factory in Germany, is building a second one in Hungary, and has a licensing deal with Ford to support the construction of a third one in Michigan.

Related Trustee Chair Activity

Scott Kennedy, “The Biggest But Not the Strongest: China’s Place in the Fortune Global 500”, CSIS Trustee China Hand Blog, August 18, 2020

Scott Kennedy, “The Chinese EV Dilemma: Subsidized Yet Striking”, CSIS Trustee China Hand Blog, June 28, 2024

Ilaria Mazzocco, “Balancing Act: Managing European Dependencies on China for Climate Technologies”, CSIS, December 13, 2023 

Ilaria Mazzocco, Ryan C. Berg, Rubi Bledsoe, “Driving Change: How EVs Are Reshaping China’s Economic Relationship with Latin America”, CSIS, September 19, 2024

Ilaria Mazzocco, Gregor Sebastian, “Electric Shock: Interpreting China’s Electric Vehicle Export Boom”, CSIS, September 14, 2023

Qin (Maya) Mei, “Fortune Favors the State-Owned: Three Years of Chinese Dominance on the Global 500 List”, CSIS Trustee China Hand Blog, October 7, 2022

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Nic Rogers

Nic Rogers

Former Associate Director, Trustee Chair in Chinese Business & Economics
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Ray Wang

Ray Wang

Research Intern, Trustee Chair in Chinese Business & Economics
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