Globalization isn’t dead—it’s radically transformed

August 3, 2021, 10:36 AM UTC

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On Monday, Fortune released its 2021 Global 500, a list of the world’s biggest companies. Along with the rankings, we published two must-read articles explaining how “globalization” is morphing into something new and different in the wake of the pandemic.

The first of those articles is this analysis of the new Global 500 by Geoff Colvin. He writes: “Despite dire predictions, globalization didn’t die. It evolved. Onshoring, nearshoring, and reshoring have become imperatives for businesses…whose supply chains snapped in 2020.”

Geoff points out that the “long-standing model of Western companies sourcing goods from China and ultralow costs” was in trouble before the pandemic because of tariffs and rising Chinese labor costs. The pandemic brought abrupt shutdowns at many Chinese factories, forcing global businesses to rethink their supply chains. The lesson many big companies have learned, Geoff argues, is that “while low costs are great, they aren’t risk-free.”

Now, more and more U.S. and European firms are shifting production to Asian countries like Vietnam, Thailand, and India, or low-cost neighbors such as Mexico and Poland. Foxconn, the Taiwanese supplier to Apple that is China’s largest private employer, has moved iPad production to Vietnam and is opening a $1 billion plant in India. Even Chinese manufacturers like TCL, a television manufacturer, and Huafu, a textile producer, are setting up operations in Vietnam.

In a separate essay, Fortune senior writer Eamon Barrett unravels the riddle of how Japan’s Toyota Motor Corp. (No. 9 on this year’s Global 500 list) managed to keep factories humming despite a global semi-conductor shortage that forced rival auto-making giants—including Ford Motor Co., General Motors, Volkswagen, Daimler, BMW, and Renault—to scale back production. The answer, Eamon says, lies in the “hard lessons [Toyota] learned a decade ago after the Fukushima earthquake and tsunami that devastated swaths of Japan’s industrial heartland.”

Toyota famously pioneered the “just in time” manufacturing model that abhors inventory and demands instead that supplies reach production lines at the precise second they’re required. But in Fukushima’s aftermath, Toyota has learned to love the stockpile.

“Like all automakers, the company relies on a multitude of components that contain semiconductors such as smart displays or audio systems,” Eamon explains. “Toyota requires suppliers of those components to maintain up to a six months’ buffer supply of chips dedicated to Toyota orders.”

In other words, the master of “just in time” is perfecting the art of “just in case.”

As always, the Global 500 issue includes a breakdown of companies by geography. This year China, including Hong Kong, accounted for 135 companies on the list. That’s a gain of ten companies from last year—and more than the number of Global 500 companies hailing from any other nation, including the U.S., which this year accounted for 122. (China’s lead is even wider if you add the eight companies from Taiwan.)

Bear in mind that the Global 500 ranks companies by revenue, not profits or “competitiveness.” And, yes, China’s increased presence on this year’s list partly reflects the fact that the Chinese economy bounced back from the COVID shock earlier and more rapidly than the economies of the U.S. and Europe. But this is a clearly a long-term trend: the graph above shows how quickly companies in Greater China have come to dominate.

More Eastworld news below!

Clay Chandler

This edition of Eastworld was curated and produced by Nicholas Gordon. Reach him at


Malaysia’s on-again, off-again Parliament

It’s been a chaotic week for Malaysia’s legislature. Sessions have been suspended since Jan. 12 under a state of emergency, but Malaysia’s king released a statement on June 16 suggesting that parliament should reconvene as soon as possible. Yet the last day of a special parliamentary session to discuss Malaysia’s COVID response and approve plans for a hybrid legislature was suspended due to an outbreak of cases in parliament itself. Opposition politicians believe that the suspension is a ploy from Prime Minister Muhyiddin to avoid a no-confidence vote. Channel NewsAsia

Paying attention to Southeast Asia

U.S. Secretary of Defense Lloyd Austin completed a tour of Southeast Asia, with stops in Singapore, Vietnam and the Philippines. The Biden Administration has been criticized for neglecting Southeast Asia, especially as China bolsters its investment and trade links with the region. Austin’s trip did lead to one diplomatic achievement: Philippine President Rodrigo Duterte promised to renew the Visiting Forces Agreement, which governs the American presence in the country. Bloomberg

Sanctions and anti-sanctions

China’s anti-sanctions law, which punishes entities involved in implementing or assisting with sanctions, is likely to be extended to Hong Kong. This potentially puts foreign banks, especially American banks, in a bind: the United States would require compliance with U.S. sanctions, whereas China and Hong Kong would require noncompliance. There may already be one casualty: State Street, which currently manages Hong Kong’s biggest ETF, may need to be replaced. South China Morning Post

Moving past 'big data'

When it comes to the development of artificial intelligence systems, access to gigantic data sets may not be as much of an asset as people think. Speaking at the Fortune 40 Under 40 China event, founder of Landing AI and Coursera Andrew Ng argued that the next stage of A.I. development will rely on the quality, not quantity, of data. Fortune

Henan floods

Beijing has ordered a probe into the deadly floods caused by Typhoon In-Fa. The official death toll jumped dramatically on Monday as authorities revised casualty figures upward from 99 to 302 as more bodies are uncovered. The city of Zhengzhou received eight months’ worth of rainfall in one day, which flooded roads and the city’s subway system. Bloomberg


China gaming Shares in companies like NetEase and Tencent crashed on Tuesday morning after a Chinese state media outlet called video games “spiritual opium.” In response to government concerns about gaming addiction, Chinese video game companies have implemented measures to limit the amount of time children can spend on their apps. Interestingly, a few hours after stocks crashed, the state media outlet pulled the column.

UdaanThe Indian B2B platform that connects producers and manufacturers with the mom-and-pop stores that serve 90% of India’s consumers is eyeing an IPO. The platform was the fastest Indian tech firm to achieve unicorn status. If Udaan formally announces its IPO, it will follow several other Indian startups that have already done so, including PolicyBazaar and Nykaa

AfterpaySquare Inc. will purchase the buy-now, pay-later service Afterpay. The service is popular among younger consumers who may not have access to traditional credit. The $29 billion deal is both Square’s largest acquisition and the largest-ever bid for an Australian company. 

MatrixportThe next crypto startup from Wu Jihan, the founder of Bitmain, announced it had achieved unicorn status on Monday after a new funding round from investors like Tiger Global, Dragonfly Capital and Qiming Venture Partners.

Chip shortage — Countries and companies are investing in chip production in response to the global semiconductor shortage. China in particular spent $35 billion on semiconductor development in 2020, up 407% from 2019. Yet analysts are concerned that a potential overreaction may lead to an oversupply, putting chipmakers at risk. 

Sam Bankman-Fried — The Hong Kong-based billionaire founder of crypto exchange FTX is a devotee of “effective altruism”a doctrine that encourages people to maximize their positive social impact. But is the ugly side of crypto undercutting his good intentions? He tells Fortune: “The plan of ‘be a bad actor and make a lot of money’ is not actually a good plan, even if you’re then gonna use that money to try and do good for the world.”



One third of Hong Kong’s population is now considered “fully vaccinated,” with 44% of the population receiving at least one dose. While still far behind places like the U.K., the U.S. and Singapore, the accelerated pace of vaccinations is a change from anemic demand earlier in the year. The city now hopes to hit 70% with at least one dose by October.

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