China's major private-sector enterprises are seeing steady improvement in revenue and technological innovations but are also facing drops in profitability and operational efficiency, according to an annual report on the top 500 Chinese private enterprises by the All-China Federation of Industry and Commerce (ACFIC). The Top 500 private companies booked total revenue of CNY38.32 trillion last year, which represents a 9.13% year-on-year growth. “In the face of rising economic uncertainty amid the Covid-19 pandemic, Chinese private enterprises still made new breakthroughs, epitomized by the total scale, improving quality, optimized size and structure as well as overall technological innovations,” said Huang Rong, Vice Chairman of the Federation. The entry threshold for the Top 500 private enterprises reached CNY26.37 billion in revenue for this year’s ranking, CNY2.87 billion more than last year, and 88 of the top 500 have total assets exceeding CNY100 billion.
E-commerce company JD topped the list for the first time, with revenue of CNY951.59 billion, followed by Alibaba Group, Hengli Group and Amer International Group. Huawei Technologies Co dropped to fifth this year from first last year. Tencent ranked sixth and property developer Country Garden ranked seventh. A total of 28 Chinese private enterprises were among the world's Top 500 in 2022. However, the report noted that the Top 500 private firms witnessed drops in net profit and operating efficiency in general. They gained a net profit of CNY1.73 trillion last year, down 12.28% year-on-year. China’s private businesses, which accounted for over 97% of the country’s total market entities last year, and are a primary driver of the country’s economic development. They have contributed about 50% of the country’s tax revenue, 60% of gross domestic product (GDP), 70% of technological innovation and 80% of urban employment, according to the Ministry of Industry and Information Technology (MIIT). The Top 500 companies accounted for 7.91% of China's total tax revenue.
China's private enterprises have injected strong growth momentum into foreign trade. The export value of the Top 500 companies reached USD245.4 billion, up 85.48% on a yearly basis and accounting for 7.3% of China's total exports, up 2.19 percentage points from the previous year. The total trade value of Chinese private enterprises reached CNY13.68 trillion, up 14.9%, accounting for 50.1% of the country's total foreign trade. Their exports totaled CNY9.3 trillion, up 20.2%.
A recent meeting of the Political Bureau of the Communist Party of China (CPC) said that full play should be given to encourage initiative among enterprises and entrepreneurs so that “state-owned enterprises dare to act, private enterprises dare to develop into new areas and foreign enterprises dare to make investments”. The ACFIC report added that the Top 500 Chinese private companies have gained momentum in technological improvements. There are 288 companies among the Top 500 whose R&D staff account for more than 3% of all employees, and the proportion exceeds 10% for 158 companies. In terms of R&D value, Huawei Investment & Holding retained first place with CNY142.7 billion in R&D investment. The number of valid patents increased 53.6% year-on-year, and valid domestic trademark registrations were up nearly 25.4%.
According to the report, the Top 500 private enterprises provided over 10.9 million jobs, accounting for 1.47% of the nation's workers. Among them, JD.com employed the most people for a second consecutive year, amounting to 385,400.
This overview is based on reports by the China Daily and the Global Times.
