According to the latest Fortune magazine survey of the world’s largest corporations by revenue, China has finally reached parity with the US. The 2019 Fortune Global 500 list, and a companion article titled “It’s China’s world,” count a record high 119 companies in China (and another 10 companies in Taiwan) toward the following claim: “For the first time since the debut of the Global 500 in 1990, and arguably for the first time since World War II, a nation other than the US is at the top of the ranks of global big business.”

According to the Cambridge English Dictionary, a nation can either be a country of people living in one area with their own government, language and traditions, or “a large group of people of the same race who share the same language, traditions, and history, but who might not all live in one area.” An example of the latter would be the Navajo nation.

When Fortune made the above claim, we must assume the author was referring to the “Chinese nation” and not China, since the US would still dominate the rankings if Taiwanese companies were excluded from the count attributed to China. American companies account for 121 of the world’s largest corporations by revenue – two more than China.

For many Taiwanese, being included in any description of a “Chinese nation” is extremely controversial, given Taiwan’s own language, traditions, history, military and foreign relations. For these reasons, many Taiwanese are also likely to take offense at their 10 top 500 national companies being considered Chinese – even though, on the Fortune list, Taiwan is considered a separate country. In a recent poll only 3.6% of Taiwanese said they considered themselves solely Chinese, while the majority (56.9%) identify as exclusively Taiwanese.

Beyond the argument over the number of Chinese companies making the Fortune list, there is also the issue of quality. Many of the Chinese companies listed are operating within a 1.3-billion-person bubble, selling their services with limited or no competition from abroad. In China, the “big four” state-owned commercial banks, Bank of China (ranked 44), China Construction Bank (31), Industrial and Commercial Bank of China (26), and Agricultural Bank of China (36) dominate the banking sector.

Thirty-nine foreign banks constitute a mere 1.4% of China’s banking assets in 2015, down from 2.4% in 2007. This is a direct result of severe restrictions on offering their services in China. Foreign banks were not eligible for subsidies during the 2007-08 financial crisis, they face more restrictive quotas on foreign debt, guarantees, restrictions on loan-to-deposit ratios, and because of capital controls are forced to raise capital from local deposits. Chinese banks have long been nurtured within a protected environment, while benefiting from a large deposit base with growing incomes, to become among the largest banks in the world.

Other sectors are similarly controlled to limit competition. Consider China National Tobacco, which holds a monopoly over the world’s largest cigarette market. By severely restricting the efforts of global tobacco brands such as British American Tobacco, the research company Euromonitor estimates China National Tobacco controls 97% of the Chinese market.

Indeed, some Chinese companies have been able to grow not only in size but to extend their business outside of China, among them well-known high-tech companies like Huawei (rated 61), Alibaba (182), and Xiaomi (468). Yet beyond a handful of popular brands, and in some less than transparent countries, most Chinese companies still struggle to compete internationally. According to the World Economic Forum’s Global Competitiveness Index, China ranks 28th, well behind the top five spots held by the US, Singapore, Germany, Switzerland and Japan.

There may well come a day when China truly dominates the business world, but until Beijing is confident enough to lift restrictions on foreign investment and allow its national champions to compete on a level playing field at home, Chinese companies will fail to develop fully and will continue to lag behind their international competition in markets where price is not the only consideration.