Chinese companies show resilience against external headwinds

Note: The following article is taken from the Chinese-language "Commentaries on International Affairs."

China has unveiled a list of its top 500 enterprises for 2019 exhibiting better results and steady growth. The report, based on company earnings for 2018, reflects the resilience of Chinese enterprises with improved performance and upgraded industrial structure despite the complicated and grim global economic situation.

A service station run by Sinopec, which tops the 2019 list of the top 500 Chinese enterprises jointly issued by the China Enterprise Confederation and the China Enterprise Directors Association for the 18th consecutive year. [Photo: IC]

According to the new listing, which was jointly issued by the China Enterprise Confederation and the China Enterprise Directors Association for the 18th consecutive year, the top 500 companies generated total revenues of nearly 80 trillion yuan (11 trillion U.S. dollars) in 2018, up 11 percent from the previous year. The combined assets of the 500 enterprises stood at nearly 300 trillion yuan (over 40 trillion U.S. dollars), up 9 percent. In addition, their R&D investments increased nearly 22 percent year-on-year to surpass 970 billion yuan (136 billion U.S. dollars). The number of firms with revenue surpassing 100 billion yuan (about 14 billion U.S. dollars) reached 194, up from 172 the year before.

In 2018, the top 500 companies participated in the development of 1,905 international standards, up 22 percent from the number recorded in 2017. And in July, China overtook the United States for the first time in the number of companies on the Fortune Global 500 List. Taken together, the facts reveal the increasing international influence of Chinese enterprises, which also can be seen in a recently released documentary that has sparked wide discussion on the internet. The Netflix documentary, American Factory, tells the story of a Chinese glass manufacturer setting up a plant in the heart of the Rust Belt, creating jobs and helping improve the livelihoods of the local people.

The achievements made by Chinese firms against the backdrop of rising trade protectionism and unilateralism owe a lot to the country’s intensified efforts to undergo further reform and opening-up. Measures taken include a larger scale of tax and fee cuts, steady monetary policies, and streamlining the business environment, which have helped to pump up business confidence and growth momentum.

[Photo: VCG]

The positive results are also closely linked to the efforts Chinese companies have spent on innovation and transformation. Thanks to the improved qualities of Chinese products, the American clients of some Huzhou-based companies in Zhejiang Province have pledged to continue importing from their Chinese partners even if it means they have to pay the majority of the additional tariffs. In Shanghai, some automakers have adopted intelligent manufacturing methods, which help to relieve the pressure on operational costs.

The new listing also reflects the entrepreneurship of Chinese business operators. As San Francisco-based HAX Accelerator, which offers support for startups enabled by hardware, has pointed out, it’s drastically increasing its investment in China because “we're seeing entrepreneurs that are really savvy, really clever, working really hard, but also developing technology in an entirely new way.”

The performance of Chinese enterprises mirrors the stability and resilience of the Chinese economy. In the first seven months of this year, China’s actual use of foreign capital increased 7.3 percent over the same period last year. And by far, the number of American firms that have registered for the second China International Import Expo, which will be held in Shanghai in November, has exceeded that recorded last year. And the exhibition areas designated to American companies is 35 percent larger than that of last year. Foreign businesses have demonstrated their faith in the Chinese economy by voting with their feet.