Huawei leads top 500 Chinese private firms 2010
Huawei Technologies Co ranked first on the 2011 list of China's top 500 private enterprises, released on Aug 25 by the All-China Federation of Industry and Commerce.
The minimum threshold of annual revenue for a company to be named on the list increased to 5.06 billion yuan (US$791.8 million) this year, up 1.4 billion yuan (US$219.08 million) from last year.
The number of private enterprises on this list with an annual revenue of more than 10 billion yuan (US$1.56 billion) rose to 220 this year from 126 last year. Soaring raw material prices and a manpower shortage were the two major factors affecting private enterprises, according to the association.
Annual turnover of each of the top four enterprises on the list exceeded 100 billion yuan (US$15.65 billion), with Huawei leading with revenue of 182.5 billion yuan (US$28.56 billion). Huawei is the world's second-largest telecommunications equipment manufacturer after Ericsson. Jiangsu Sha Steel Group, Suning Appliance Group and Lenovo Group were the other firms in the top four.
The federation also revealed that among the top 500 firms, 137 had cumulative direct overseas investments of 6.18 billion yuan (US$966.59 million) last year, a whopping 174% growth over 2009. This points to the difficult operational environment in China that is prompting private enterprises to expand to overseas markets, avoiding the fierce competition in the domestic market.
Ouyang Xiaoming, deputy secretary general of the federation, said high raw material prices last year were the biggest factor affecting the growth of private enterprises, followed by manpower shortages, high taxes and an insufficient supply of land. However, the impact of the global financial crisis on private companies had eased significantly.
A recent survey of employment preferences among university graduates captured the fierce competition for talent between private and state-owned enterprises.
According to the survey, conducted on 14 universities in Tianjin this year, of 1,416 new graduates, 50.86% hoped to work for national enterprises, 33.83% wanted to work for foreign companies, and only 20% wanted to join large private enterprises.
Compared with government-backed enterprises, it is difficult for private firms to grow in China, though they have the advantage of a flexible management and more efficient use of resources.
According to financial reports, three of China's major state-run enterprises, China National Petroleum Corp, China Petroleum & Chemical Corp (Sinopec) and China Mobile registered net profits of 139.9 billion yuan (US$21.89 billion), 70.7 billion yuan (US$11.06 billion) and 119.6 billion yuan (US$18.72 billion), respectively, or a total of 330.2 billion yuan (US$51.67 billion). This compared to the cumulative net profits of 391.1 billion (US$61.2 billion) registered by the top 500 private enterprises.