The inevitable changes to the world financial and political landscape continues.  This week's news showed that more Chinese firms landed on Fortune Magazine's annual list of 500 top global companies than ever before.  The numbers showed that 37 Chinese companies made the list which is based on total revenue.  This represented an all time high and up from last years number of 28 and only 8 just a decade ago.  Needless to say that the number of U.S. companies on the list dropped to 140, the lowest total ever recorded.  The report mirrors much of what we have already commented on in this newsletter; namely that China is gradually becoming the new world economic leader.

Assuming no major political or economic crisis in China ( and let's add here that this is a very big assumption given China's continued ongoing issues with Taiwan and trade issues with the U.S.) the Fortune report indicated that up to a quarter of the world's largest corporations may be Chinese in a decade.  Many have written about China's economic development with the consensus being that never in history has any country sustained the growth rates that China has.  Either China will continue for the next few decades or it will falter.  One economist, Arthur Kroeber, wrote in the China Economic Quarterly several years ago that China is positioned to grow its economy for at least two more decades.  It is clear, that China's leaders are on a singular path to transform their country into a world-class economic player.

If I could summarize the developing issues between China and America I would compare it to a dependent child growing up to be an adult and then having the inevitable decision regarding his/her parents, those who have supported the child to adulthood.

At some point, the child must decide whether to remain "dependent" or to venture off on its own and become fully "independent" of its benefactor.  The child can only go one of two ways, generally.  Either to forget ambitions of grandeur and independence, or to take the plunge and sever further need for parental financial support.  China seemingly is beginning to change its course.  Early on in its economic development there was no question that the Chinese government relished and perpetuated the Chi-America umbilical chord.  Of late however, it appears that China is changing course and is increasingly convincing itself that there are more negatives than positives in continued dependence on the U.S.  This issue alone will determine much of what transpires over the next few years.  It bears very close watching.