Chi­nese firms as­cend global rank­ings

China Daily (Hong Kong) - - BUSINESS -

BEI­JING — Chi­nese firms con­tinue to as­cend global rank­ings as their com­pet­i­tive­ness grows with the coun­try’s tran­si­tion­ing econ­omy. The For­tune Global 500 list is see­ing a China boom this year, the renowned mag­a­zine said on its web­site.

Chi­nese firms filled an un­prece­dented 115 places on the 2017 list re­leased last week, only 17 less than the top per­former, the United States, and mark­ing the 14th year China has in­creased its pres­ence on the list.

The Chi­nese com­pa­nies mak­ing the list were mainly in­volved in the internet, re­tail, fi­nance, en­ergy and prop­erty sec­tors.

China’s State Grid and oil giant Sinopec Corp were sec­ond and third, with rev­enue reach­ing $315 bil­lion and $268 bil­lion, re­spec­tively, in 2016.

Tele­com giant Huawei rose from the 129th po­si­tion last year to 83rd this year, beat­ing all global peers in its sec­tor.

The per­for­mance of com­pa­nies can well mir­ror changes in eco­nomic condi- tions. The Chi­nese econ­omy’s steady ex­pan­sion in 2016 and the first half of this year are con­ducive to the rise of large firms, ac­cord­ing to Liu Qiao, di­rec­tor of Guanghua School of Man­age­ment at Pek­ing Univer­sity.

China re­ported fasterthan-ex­pected 6.9 per­cent GDP growth in the first half of the year, set­ting the coun­try on course to com­fort­ably meet its 2017 tar­get of about 6.5 per­cent.

Chi­nese com­pa­nies might out­num­ber their US coun­ter­parts in the For­tune Global 500 rank­ings within the next three to five years as the world’s sec­ond largest econ­omy con­tin­ues to ex­pand.

One bright spot is the rise of pri­vate com­pa­nies. Ten Chi­nese firms hit the list for the first time, most of which are pri­vate com­pa­nies, in­clud­ing internet ser­vice gi­ants Alibaba and Ten­cent.

These two Chi­nese internet gi­ants, to­gether with JD.com, share their places in the top six global internet com­pa­nies with their US coun­ter­parts. SOEs

This in­di­cates that new growth en­gines are grow­ing stronger in China, said Bai Ming, deputy di­rec­tor of the in­ter­na­tional mar­ket re­search in­sti­tute of Chi­nese Academy of In­ter­na­tional Trade and Eco­nomic Co­op­er­a­tion.

Merg­ers and re­or­ga­ni­za­tions also helped Chi­nese State-owned en­ter­prises lift global com­pet­i­tive­ness by op­ti­miz­ing al­lo­ca­tion of in­dus­trial re­sources, Bai pointed out.

A to­tal of 48 SOEs directly un­der the cen­tral govern­ment made it into the list, in­clud­ing re­or­ga­nized com­pa­nies China Baowu Steel Group Cor­po­ra­tion and CRRC Cor­po­ra­tion.

China Min­metals Cor­po­ra­tion rose from the 323th po­si­tion last year to 120th this year af­ter im­ple­ment­ing strate­gic re­or­ga­ni­za­tion with Me­tal­lur­gi­cal Cor­po­ra­tion of China in late 2015.

China has been en­cour­ag­ing merg­ers and re­or­ga­ni­za­tions among the State sec­tor and plans to re­duce the num­ber of cen­tral SOEs to un­der 100 as part of the on­go­ing re­forms to im­prove ef­fi­ciency of the com­pa­nies.

How­ever, Chi­nese com­pa­nies still have much room for im­prove­ment in terms of profit ca­pa­bil­i­ties.

The av­er­age re­turn on as­sets for the 109 listed Chi­nese com­pa­nies stood at 1.65 per­cent, far lower than that of their US coun­ter­parts, ac­cord­ing to Liu.

China’s la­bor mar­ket, in­dus­trial struc­ture, con­sump­tion de­mands and do­mes­tic and over­seas eco­nomic con­di­tions will un­dergo pro­found changes in the fu­ture, Liu said.

directly un­der the cen­tral govern­ment were in­cluded in this year’s For­tune Global 500 list

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