In a continuously improving business environment, Shenzhen's GDP has maintained a rapid development momentum, and a large number of leading companies have taken the global stage. Seven Shenzhen-based enterprises which include PingAn Group, Huawei, Amer International, China Merchants Bank, Vanke, Tencent and Evergrande ranked on the Global 500 List released by Fortune in 2017. Six of the enterprises are native Shenzhen-based enterprises with the exception of Evergrande. The exports of the Industry argued that there are still a large number of promising enterprises in Shenzhen, which are likely to be on the Fortune Global 500 list in upcoming years. Experts suggest that Shenzhen should make greater efforts to create an innovative ecosystem, cultivate more enterprises and enable them to be benchmarks in various fields.
"Innovation" is the commonality among the Global 500 enterprises.
Ten years ago, PingAn Group was the only "Global 500" enterprise in Shenzhen. From 2015 to 2017, there were 4, 5 and 7 respectively, with a basic increase of one each year. At the beginning of the "13th Five-Year Plan", Shenzhen committed to cultivating eight to ten "Global 500" enterprises by 2020.
"Cultivating more Global 500 companies is of great significance to Shenzhen". Global 500 enterprises are giant enterprises that enjoy technological integration advantages in basic R&D guidance, and the marketing and industrialization processes of new products. They can merge and acquire small and medium-sized enterprises, and achieve the innovative integration of various industries. It is especially important for innovative cities that take the high-tech industry as a cornerstone such as Shenzhen. Cultivating more Global 500 companies is of great importance for Shenzhen and even China in building an innovative regional system with global competitiveness, and providing strong support for the construction of the world-leading Guangdong-Hong Kong-Macao Greater Bay Area.
At present, six of the seven Shenzhen-based Global 500 companies are native enterprises in Shenzhen, and innovation is their common characteristic. PingAn, China Merchants Bank and Vanke are the embodiment and sterling examples of achievement in China’s reform and opening up at the current stage. Tencent is a representative of the new economy, and Huawei is a pillar enterprise of China’s communications industry.
These Shenzhen-based enterprises on the Fortune Global 500 list with rising rankings have several common features: sustainable innovation capability, entrepreneurial spirit, international strategy, excellent management, and high growth industries. These enterprises are in the communications, real estate, banking, insurance and non-ferrous metals industries, which all have seen high growth rates in China in the past 30 years. In addition, Shenzhen's complete industrial chain and strong industrial support are the important reasons for the emergence of Global 500 companies in Shenzhen. These enterprises have developed rapidly and constantly carried out mergers and acquisitions to become leading enterprises in their industry and among the world's top 500 companies.
There are promising players in the new economy field.
The entrance thresholds of the Fortune Global 500 in the past 5 years (according to annual business income metrics) were above 23 billion USD from 2013 to 2015, declined to 20.92 billion USD (less than 140 billion RMB) in 2016, and slightly increased to 21.609 billion USD in 2017. According to the current exchange rate, the thresholds were 130-150 billion RMB in recent years. According to the ranking of China’s Top 500 enterprises released by Fortune last year, in addition to the seven Global 500 companies, BYD, ZTE Corporation and China Merchants Shekou were Top 100 enterprises with BYD and ZTE having a business revenue of more than 100 billion RMB. In the next few years, what other enterprises in Shenzhen will become Global 500 companies?
In various Shenzhen industries, there are many large-scale leading enterprises with strong innovative capability, robust competitiveness and hundreds of billions of capital, that are likely to rank in the world's top 500 companies. These enterprises have similar technological innovation characteristics with the new companies on the Fortune Global 500 list in the past 30 years, and some are poised to join the ranks of the world's top 500 enterprises. In the future, a number of the world's top 500 enterprises will emerge in the new energy, intelligent manufacturing, supply chain, finance and other fields. ZTE Corporation and BYD will be top enterprises and they should enter the list of Global 500 by 2025. China General Nuclear Power Corporation (CGN), CIMC, Tempus, SF, Eternal Asia, DJI-Innovations, Shenzhen Investment Holdings and other municipal state-owned enterprises are promising enterprises. The goal is to further cultivate 8~10 Fortune Global 500 companies by 2020, this is likely to be achieved ahead of schedule.
The Shenzhen-based enterprises that may on the Fortune Global 500 list in the future may come from the new economy field and are closely related to the national strategy. BYD represents the new energy industry, Foxconn in intelligent manufacturing industry, BGI in the health field, and ZTE in the communications industry all have the chance to be on the list.
The government should create an innovative ecological system.
In recent years, Chinese companies on the list of Fortune Global 500 are mainly located in three cities: Beijing, Shanghai and Shenzhen. However, Shenzhen's method of cultivating Global 500 companies is different.
Shenzhen finds a new path for innovation and entrepreneurship, cultivates a series of world-class local enterprises, and seeks development in the global market, while demonstrating super strong external radiation ability. This is a main benefit of the innovation soil of Shenzhen. Innovation is the main driving force behind Shenzhen's development. Openness and tolerance are two pillars of Shenzhen's development. Deepening institutional reform provides a guarantee for the development of Shenzhen. By encouraging innovation and entrepreneurship, providing good services for enterprises and creating a good government environment, Shenzhen integrates the interaction and cohesion of the enterprise, industrial, innovation, investment, and ecological chains.
In recent years, the business environment of Shenzhen has been constantly optimized, and its GDP continues to maintain the momentum of rapid growth. In 2018, Shenzhen has issued the Several Measures on Strengthening the Reform of Business Environment in Shenzhen, which proposes twenty major reform measures from six aspects such as trade and investment environment. It aims to create an international first-class business environment with the highest service efficiency, the most standardized management, the most dynamic market and the best comprehensive cost efficiency. On March 1, 2018, the Regulations for National Independent Innovation Demonstration Areas in the Shenzhen Special Economic Zone was formally implemented, providing a more powerful legal guarantee for the innovation activities of Shenzhen and creating a more favorable policy environment.
Compared with small and medium-sized enterprises, the Global 500 enterprises have different requirements for the business environment. To support the further development and expansion of these enterprises, we should continue to strengthen the construction of the technological innovation system in Shenzhen, and build a new innovation system led by Global 500 enterprises. This includes the active innovation of small and medium-sized innovation enterprises, joint support, mutual contact and a mutual balance of government, universities and non-profit scientific research institutions. We should also attach importance to the development of new industries such as new technology, FMCG and logistics, making Shenzhen a key area to cultivate Fortune Global 500 enterprises.
The Fortune Global 500 is a result of implementing the right development mode in the economic environment of Shenzhen. Compared with the title of "Global 500", it is more important for enterprises to gain a foothold on the global stage. Instead of focusing on the Global 500, the government needs to create an innovative ecosystem and pay more attention to the "little giants" and "invisible champions" in various industries.
While paying close attention to the Fortune Global 500 companies, we should also guide small and medium-sized enterprises in making special and innovative development, accelerate the transformation and upgrading of small and medium-sized enterprises, encourage enterprises to innovate, vigorously protect the intellectual property of "small giant" enterprises, provide a good environment for development, and create good external conditions for these enterprises to retain core talents.
