China's top 500 companies have been reseated with the release of the annual ranking list in September.

Since 2002, the China Enterprises Confederation, together with the Enterprises Directors Association, has released a report analyzing China's top 500 companies on an annual basis. Starting from last year, they also prepared additional reports on China's top 500 manufacturers and another on the top 500 brands in the service sector. To better advertise tax contributions made by large enterprises with better performance, the two organizations have published a list of the top 200 most profitable enterprises and a list of the top 200 corporate taxpayers, based on their net profits and taxation on revenues.

In line with the full implementation of the state strategy to revitalize central China, the two organizations chose Zhengzhou in Henan Province as host city for a ceremony unveiling the lists.

Threshold raised

This year, China Petroleum and Chemical Corp. (Sinopec), China's largest oil refiner, topped the Top 500 list, and the runner-up, China National Petroleum Corp. (CNPC), ranked first among the top 200 most profitable enterprises and top 200 corporate taxpayers. Baosteel Group in Shanghai and State Grid Corp. once again were named the top manufacturer and top service company of the year, respectively.

The China Enterprises Confederation said that as the economy grows, the indicators under certain items have been adjusted accordingly. For example, revenues of the top 500 enterprises totaled 14.1 trillion yuan ($1.8 trillion) in 2005, up 20.4 percent over a year earlier, and the threshold for the ranking increased by 6.07 billion yuan ($760 million), 1.5 billion yuan ($188 million) more than the previous year. Among China's top 500 companies, 23 enterprises have qualified for the Fortune Global 500 for 2006 in terms of revenues, and 19 of them were considered candidates for the list.

Last year, 84 enterprises of the top 500 reported a profit above 1 billion yuan ($125 million), adding up to 548.2 billion yuan ($69 billion) in total volume and accounting for 85 percent of all the listed companies. The most profitable 200 comprised 96.6 percent of the 500 in terms of net profits, which means they hold leading industry roles.

For taxation, the top 200 enterprises paid tax totaling 9.24 billion yuan ($1.16 billion), or 93 percent of the top 500's total paid taxes, which equal to 30.8 percent of the national tax revenues in 2005.

Gap reduction

In terms of an overall perspective, China's top 500 enterprises for 2006 maintained steady and sound development. In particular, the gap between them and leading global companies had been further reduced.

The revenues of China's top 500 were $1.8 trillion, 12.7 percent higher than the previous year. The growth rate was 7.7 percentage points higher than the average level of the Fortune Global 500 companies for the same year.

According to the Enterprise Directors Association, in 1995, only three Chinese enterprises were included in the world's top 500, but this year the number reached 19. Among them, the champion of China's top 500, Sinopec, jumped to the 23rd place from 31st a year earlier, marking a new high for China's indigenous businesses.
 However, China's top 500 still lags far behind the global level in terms of volume indexes. For the enterprise scale, the total corporate assets for China's top 500 merely equal to 7.1 percent of the world's top 500. Moreover, most industries to which China's top 500 belong are low in profits and productivity.

Power sector growth

Professor Liu Jisheng of Tsinghua University pointed out that the growth rate of China's top 500 slid in 2006 compared with in 2005. So far this year, the top 500 has realized a profit of 64 billion yuan ($8 billion), 22 percent higher than in 2005, but the growth rate has slumped 43 percentage points.

Heavy and chemical industries do not dramatically change their extensive growth mode. Calculated from the number of enterprises listed in the top 500, the three leading industries are steel and metallurgy, construction and coal production, and they comprise 26 percent of the total number. The net profits of iron and steel, construction, and petroleum and chemical industries account for one third of the entire top 500.

"The energy industry of China is undergoing rapid growth, and especially the soaring coal and electric power sectors," warned Ma Kai, Minister of the National Development and Reform Commission, the country's top economic planner. "If it continued, the realization of an energy-saving society and development goals contained in the 11th Five-Year Plan (2006-10) would face big challenges and troubles."

(China.org.cn)