China’s economy boost gives great chances to many foreign companies. At the same time, Chinese local companies also get nurtured in this economy boosting trend.
The China Enterprise Confederation announced that the country’s top 500 giants, such as Baosteel, Sinopec and China Mobile, are improving their status and narrowing the gap with their foreign counterparts. The total revenue of the top 500 companies is up to $2.99 trillion, equivalent to 12.7% of the global top 500 and the profits around $188.4 billion, 11.9% of the global top 500. Compared to the last year’ level, the revenue and profits increased by 10.7% and 6.5% respectively.
One important issue to notice is that one fifth of the China’s top 500 are private enterprises. Private enterprises’ capability of absorbing new technologies and management experience has grown more matured.
The national economy boost offers good business environment for these top 500 enterprises. The growing revenues and profits indicate that Chinese local enterprises are more competitive in the international business competition.
Analysts said the growing proportion of revenue and profits indicated that Chinese companies had become more competitive and profitable. As a consequence, their rising investment in R&D and their emphasis on exploring domestic market increase the tense of competition. The growth rate of net profits of the China top 500 is 19 times faster than that of the global top 500. However, only 39 enterprises reported overseas sales income of more than 30% of the total revenue.
Surely, foreign companies have to think seriously about these fast growing Chinese competitors now. But the risk never comes along, chances will come as well. If the China top 500 wants to seek more shares in the overseas market, they will bring many cooperation chances to the foreign companies. Foreign consulting companies, technology innovation companies can benefit from the development of Chinese top 500 companies.
The China top 500 still fell behind, especially in innovation, investment in R&D and the ability to work internationally, supply chain management and logistics costs. Foreign companies’ experience and cooperation will be indeed helpful to Chinese top companies.