Although the rise of China as an economic power has been substantial, it is sometimes worthwhile to be reminded of just how the US still dominates the world economy. While China may be catching up in GDP terms, it is still a long way behind in terms of its influence.
The latest PwC Global Top 100 Companies rankings bear this out. Of the 100 biggest companies in the world by market capitalisation, more than half are based in the US.
In total, 54 companies in the top 100 are from the US, including the entire top 10. The country accounts for 62% of the overall market capitalisation.
In contrast, only 11 companies on the list are based in China/Hong Kong. Europe accounts for the second largest proportion of the top 100 with 24 companies.
“The US has extended its leading position by using their global reach, financial strength and ability to innovate to their advantage,” said Clifford Tompsett, the head of the IPO Centre at PwC.
“We can also see that bigger companies have proven more resilient than the average, with the exception of some natural resources companies, as despite uncertain market conditions and growth perspectives, 91 companies from 2015 remained on the list as of 31 March 2016 — a stable level compared to previous years.”
The PwC rankings are compiled once a year and the 2016 list represented the first time since the financial crisis that the overall market capitalisation of the top 100 had showed a significant decrease year on year. Overall, the market capitalisation of the top 100 fell by US$668bn, or 4%, from 31 March 2015 to 31 March 2016.
The companies that saw the sharpest decline in their market capitalisations were in China and Europe. The former suffered from volatile market conditions, while the latter are caught in an environment of weak economic growth.
For the fifth year in a row, Apple retained its position as the largest company in the world, even though its market capitalisation fell by 17% over the 12 months. Google’s parent company Alphabet is now a very close second, having briefly surpassed Apple during February 2016.
Together with Amazon and Microsoft, Alphabet’s strong showing also saw the combined market capitalisation of technology companies in the Top 100 surpassing that of those in the financial sector. PwC noted that this underlined the resilience and innovation shown by these businesses.
“The global top three are now technology companies: Apple, Alphabet and Microsoft, closely followed by Facebook in sixth position,” PwC noted. “These giants have an unequalled global reach and footprint and have contributed to reshaping a digital way of life on a global scale.”
- This article was originally published on Moneyweb and is used here with permission