Private firms signal growth of quality economy
Print Edition
China’s private businesses have gained momentum in 2017, adding to positive signs of an economy that pushes forward high-quality growth.
China yesterday unveiled its latest ranking for top 500 private enterprises, with telecom equipment giant Huawei and e-commerce firm Suning atop the list amid sound development of the country’s private business.
The list by the All-China Federation of Industry and Commerce came at the 2018 Summit of China Top 500 Private Enterprises held in Shenyang, the capital of Liaoning Province.
Revenues of the nine largest private firms all exceeded 300 billion yuan (US$44 billion) in 2017. The top companies include Huawei, Suning, Amer International, JD.com, Weiqiao Pioneering Group, Legend Holdings, Evergrande, and Gome Holdings.
Of the top 500 private companies, 61 of them saw their total assets surpass 100 billion yuan last year, 11 more than in 2016.
To be listed as China’s top 500 private companies last year, an enterprise needs to have its revenues exceeding 15.68 billion yuan.
According to ACFIC vice chairman Huang Rong, the list came out of more than 4,600 Chinese private firms which voluntarily participated in an ACFIC survey. Not all big private enterprises are covered.
Since reform and opening up in the late 1970s, private businesses have assumed a bigger role in driving growth. The sector now contributes above 60 percent of China’s GDP growth and provides over 80 percent of jobs.
“The development of private investment and businesses is key to China’s economic vitality. Changes on the 500 top private firms list show new trends in the country’s economy,” said Zhang Wanqiang, an economist with Liaoning Provincial Academy of Social Sciences.
The trends, observed by Hu Biliang, an economist with Beijing Normal University, include industrial structure optimization, fewer irrational outbound investment and more research and development input.
“China’s private businesses continued to take on a sound development momentum in 2017,” Huang said, adding the private companies have steadily optimized its industrial structure with greater contribution to society.
Last year, 162 private firms in the service sector were on the list, up 38.46 percent compared with the figure in 2012. Meanwhile, the number of firms in the secondary industry fell for the fifth straight year from 380 in 2012 to 333 in 2017.
The number of export-oriented firms on the list fell from 259 in 2016 to 230 last year. The total exports of the top 500 private enterprises dropped by 16.28 percent year on year to around US$125.2 billion in 2017.
“The number of overseas investment projects for top 500 private firms has declined in 2017, for the first time in over the past five years,” said Wang Zhile, head of Beijing New Century Academy on Transnational Corporations.
“The decline is a result of the government’s strengthened efforts to curb irrational outbound investment and companies’ more prudent attitude toward overseas projects,” said Hu.
China aims to turn its economy, heavily reliant on fixed-asset investment and exports, into a service and consumption-led one.
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