During Moon Administration's 5 Years, Top 500 Chinese and Japanese Companies Advance... Only Korea Stagnates

Korea Ranks Last Among Four Major Countries in Both Revenue and Net Profit Growth Rates

[Image source=Yonhap News]

[Asia Economy Reporter Kim Jin-ho] During the five years of the Moon Jae-in administration, the number of companies from China and Japan among the global top 500 companies increased by 26 and 2 respectively, while South Korea failed to make any progress. The growth rate of South Korean companies' performance also ranked the lowest among major countries such as the United States, China, and Japan.

According to the business community on the 30th, the Federation of Korean Industries (hereinafter FKI) recently analyzed the business performance of South Korean, American, Japanese, and Chinese companies included in the Fortune Global 500 over the past five years (2017-2021), revealing that South Korean companies showed the most sluggish results.

According to the FKI, the number of Chinese companies included in the Fortune 500 increased significantly from 109 in 2017 to 135 in 2021, an increase of 26 companies. Japanese companies also increased from 51 to 53. In contrast, South Korea remained unchanged at 15 companies.

When dividing the global top 500 companies into 20 industries, the number of Chinese companies ranked first in the world by industry (based on sales) increased from 3 in 2017 to 6 in 2021, an increase of 3. Meanwhile, during the same period, the number of U.S. companies ranked first by industry decreased from 12 to 8, a decrease of 4. South Korea had no companies ranked first in any industry.

Over the past five years, South Korea ranked last among the four major countries in both sales and net profit growth rates. The combined sales of South 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 showed a negative average annual growth rate of 0.9%, declining from $41.84 billion in 2017 to $40.34 billion in 2021. This decline was steeper 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.

The FKI pointed out that the relatively insufficient scale of research and development (R&D) investment is a problem for South Korean companies, based on an analysis of the gap between South Korean companies and world-leading companies in the same industries among the global top 500 companies.

Choo Kwang-ho, head of the FKI Economic Headquarters, emphasized, “The management indicators of South Korea’s leading companies are sluggish compared to major countries, and Chinese companies, which are export competitors, are rapidly emerging, which could weaken corporate competitiveness on the global stage. We must 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.”