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Chinese Corporations Are Getting Bigger And Smarter -- Watch Out, Apple And Samsung!

This article is more than 8 years old.

Chinese corporations continue to grow bigger, according to this year’s list of Fortune Global 500 companies.

Ninety eight companies made it to the list, up from 92 last year, and 34 seven years ago; three companies continued to be in the top ten rank, beating the US and Japan—Sinopec Group (NYSE:SHI), China National Petroleum, and State Grid.

That’s certainly consistent with China’s rise to its current position as the world’s second largest economy. Japan’s rise to the world’s second largest economy in the 1980s (now third) was also followed by the rise of Japanese companies in global rankings.

Chinese corporations have been helped by a number of strategic initiatives that have expanded that nation’s economic presence in Africa, Latin America, and Europe.

While some Chinese companies are getting bigger, others are getting smarter. Xiaomi, for instance, rose to the 2nd position, up from 30th position in the recently published MIT’s 50 smartest companies list.

Most notably, Xiaomi beat Apple, which rose to the 16th position, up from nowhere last year. Several other Chinese companies made it to the list, including Alibaba and Tencent.

Apparently, a growing number of Chinese companies are turning from imitators to innovators, as further evidenced by the Fast Company’s 2015 list of World’s 50 Innovative companies, which ranked the Chinese e-commerce giant Alibaba at third position - right behind Apple and ahead of Google—“for helping consumers save, and be entertained,” according to the Fast Company report.

The list further included three Chinese upstarts, Da-Jiang Innovations, in the 22nd position, “for creating the GOPRO of the sky;” Apricot Forest in the 25th position “for seeking to cure to what ails Chinese healthcare;” and Wandoujia in the 34th position “for solving China’s mobile problem.”

All three topped Samsung Electronics, which occupied the 41st position.

It should therefore come to nobody’s surprise that upstarts like Xiaomi have outsmarted Samsung and are catching up quickly with Apple in the Chinese market.

“In product launches, (Xiaomi) compares features of its new smartphone with the iPhone’s, then announces the price—half the iPhone’s or less,” writes Eva Dou in Wall Street Journal.

“Xiaomi introduced just a few models a year, keeping down engineering expenses. It upgraded its flagship phone’s quality each year, combating initial complaints that its devices felt cheap, sometimes touting that key components matched those in the iPhone and came from the same suppliers.”

The bottom line: Chinese corporations are rapidly catching up with their foreign counterparts, in size, innovation, and marketing; and in some cases, changing the rules of the game for industry leaders like Apple and Samsung.