Top 500 enterprises grow slowly asking for innovation
- By Zhang Rui
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E-mail China.org.cn, August 24, 2015
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The 2015 China Top 500 Enterprises Summit was held in Nanning, capital of Guangxi Zhuang Autonomous Region on Aug. 22, when the identities of the nation's leading enterprises were announced. [China.org.cn] |
It was the 11th straight time that Sinopec achieved this recognition. Its gross revenue for last year was 2.88 trillion yuan (US$452.27 billion), China National Petroleum Corp. ranked second with revenue of 2.72 trillion yuan (US$427.23 billion).
The State Grid, Industrial and Commercial Bank of China Ltd., China Construction Bank Corporation, China State Construction Engineering Corporation, Agricultural Bank of China Ltd., Bank of China Limited, China Mobile Communications Corporation and SAIC Motor Corporation Ltd. rounded out the top 10.
The total of gross revenues of all the 500 enterprises reached 59.5 trillion yuan, but this was only 4.94 percent higher than the figure for the preceding year and represented one of the lowest growth rates in years. The total assets of 500 enterprises stood at 197.6 trillion yuan, 12 percent up on 2014, the slowest growth in a decade.
Enterprise losses, meanwhile, were the highest in a decade. A total of 57 enterprises among the top 500 were in the red, compared to 43 previously. Total losses were 80.39 billion yuan. At the same time, 94 enterprises suffered negative growth in their gross revenue and 169 suffered negative growth in net revenue, big increases from the previous year.
In the list, 293 enterprises are State-owned and 207 are private. But according to index, the State-owned enterprises still dominated in size, revenue, employees, taxes and profits.
The downward trend facing the top 500 enterprises, with combined revenue amounting to nearly 94 percent of the country's economic output, reflects the shifting of growth drivers, as weak demand from home and abroad has left the vast manufacturing sector saddled with overcapacity.
"It is not a surprise to see the downward trend extend further this year," said Li Decheng, Executive Vice Chairman of China Enterprise Confederation (CEC). "Economic growth is now being driven more by innovation than the intensive labor and capital investment on which these large companies have relied to now."
With the traditional industries enterprises (coal, steel, non-ferrous metal) still the pillars of the economy though many suffered negative growth, new rising giants are emerging. Five Internet companies, online retailer JD.com, Internet conglomerates Alibaba Group and Tencent, Inc., search engine Baidu, Inc. and IT infrastructure provider Inspur Co., Ltd., have made it to the top 500 list.
However, as JD.com, Tencent, Alibaba and Baidu have seen rapid growth in gross revenue, JD.com and Alibaba suffered a loss and big profit decline in net revenue respectively. Inspur grew steadily.
Technology and innovation are also redefining the way companies make money. On average, R&D expenditure of the top 500 firms is 1.28 percent of revenue, the first rise in the past five years. A total of 426 enterprises of the top 500 have invested 619.81 billion yuan for R&D expenditure, growing from the previous year.
Huawei Technologies Co Ltd., a Chinese multinational networking and telecommunications equipment and services company, invested 40.85 billion yuan in R&D, highest among all enterprises.
A total of 387 firms provided data on patents: They claimed ownership of about 531,000 in 2015, 12.6 percent up from before. Among them, 143,000 patents are patents for inventions, a gain of 14 percent. Midea Group owned most with a total of 29,549 patents while ZTE Corporation owned most invention patents, a total of 15,000.
Xin Guobin, vice minister of Industry and Information Technology, said at the summit that when enterprises move onto the world stage, they have to develop high technology, high quality and seek constant innovation.
Wang Zhongyu, Chairman of China Enterprise Confederation and China Enterprise Directors Association, said Chinese companies should develop global innovation chains more quickly and grab the leading position in high-end area like establishing technology criteria. He also stated that Chinese firms should face the Internet era challenges directly and speed up enterprise transformation as well as improving the multi-national operational capabilities and raising the China businesses' voice in the international community.
Chinese companies also made their names more than ever in the international community. A total of 94 enterprises are now listed in the global Top 500, 40 more than Japan, which is third.
However, Li Jianming, deputy director-general of the China Enterprise Confederation, said there is still big gap between Chinese and American enterprises though China's enterprises have better profit capabilities than Japanese, French, German and British companies. "In China, the most profitable enterprises are in banking industry, which is a worry; others need to improve their ability to make money."
More than 600 enterprise executives and representatives joined the summit held under the theme of "'Belt and Road' initiatives: big enterprises' new opportunities and new actions" and co-organized by the China Enterprise Confederation, the China Enterprise Directors Association, and the local governments of Guangxi Zhuang Autonomous Region and Nanning City.
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