Chinese Companies Are Not In The Top Of The World's Most Respected Companies, 2015
Again, Barron's 2015 list of World's Most Respected Companies is out.
As usual, it's got the top American companies like Apple, Walt Disney, Berkshire Hathaway, Visa, Google, Johnson & Johnson, Wells Fargo, and so on; European companies like Daimler (Germany), SAP (Germany), L'Oreal (France), AstraZeneca (UK), and Actavis (Ireland) made to the middle of the list, together with more American companies, according to forbes.
Check out the complete list of companies here.
However, there are just four Chinese companies---Alibaba Group Holding (NYSE:BABA), China Mobile (NYSE:CHL), Tencent Holdings, and China Construction Bank that have managed to crawl into the bottom of the list.
A quick glance at how the Chinese Companies were featured in Barron's List In 2014 and 2015 shows the following:
Alibaba Group Holding is 87th in the 2014 list.
China Mobile was the 96th last year as well as this year.
Tencent Holdings was the 99th last year, and 97th in 2015.
China Construction Bank ranked 100th last year, and has managed to move up into the 99th position this year.
Even though the rank has jumped up, it might still disappoint many, as China is said to have become the world's second largest economy, while there has been a big run in the 2014 Chinese equities.
Which are the features that lead companies to gain the most respect among investors? They include strong management, sound business strategy, ethical business practices, competitive edge, and revenue and profit growth, according to barron's.
It is interesting that the Chinese management is overshadowed by government control. The state continues to dictate which company will be in which business, and for how long, especially in large state oligopolies, in which the state is the largest stockholder. Hence, China does not have a strong managerial set-up. "The government remains the largest stockholder, and management often lacks the skills, the incentives, and the freedom to adjust inputs and outputs to changing market conditions," according to Forbes.
Moreover, the state also dictates and undermines the Chinese ability to innovate and to adopt new business models. They have not developed a capitalist mindset, in which the corporations tend to strengthen the owners, party bosses and government bureaucrats, rather than the society and consumers. Also, the Chinese accounting system for investors is not what it seems.
Hence, China is in the bottom line, according to Forbes. It says: "Corporate respect isn't a noticeable grant that arises with partial or outright private ownership. It is intangible asset amassed overtime with managerial, entrepreneurial, and social excellence."
