The booth of JD during the 2022 China International Fair for Trade in Services in Beijing. (PHOTO BY ZHANG WEI/CHINA DAILY)
Top Chinese private-sector enterprises are seeing steady improvement in revenue and technological innovations but are also facing slight 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, a national body serving the private sector.
According to the report unveiled on Wednesday, the top 500 private companies booked total revenue of 38.32 trillion yuan (US$5.5 trillion) last year, which represents a 9.13 percent year-on-year growth.
E-commerce company JD topped the list for the first time, with revenue of 951.59 billion yuan, followed by Alibaba Group, textile company Hengli Group and electronic information firm Amer International Group
"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 26.37 billion yuan in revenue for this year's ranking, 2.87 billion yuan more than last year, and 88 of the top 500 have total assets exceeding 100 billion yuan.
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E-commerce company JD topped the list for the first time, with revenue of 951.59 billion yuan, followed by Alibaba Group, textile company Hengli Group and electronic information firm Amer International Group. Tech giant Huawei Technologies Co dropped to fifth this year from first last year.
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 1.73 trillion yuan last year, down 12.28 percent year-on-year. Their net profit rate for sales, assets and net assets all witnessed a decrease in 2021.
China's private businesses, which accounted for over 97 percent of the country's total market entities last year, are a primary driver of the country's economic development. They have contributed about 50 percent of the country's tax revenue, 60 percent of gross domestic product, 70 percent of technological innovation and 80 percent of urban employment, said the Ministry of Industry and Information Technology.
A recent meeting of the Political Bureau of the Communist Party of China Central Committee 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".
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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 percent of all employees, and the proportion exceeds 10 percent for 158 companies.
Valid patents increased 53.6 percent year-on-year, and valid domestic trademark registrations were up nearly 25.4 percent.
"Faced with pressure and challenges (amid the pandemic), we have been insisting on innovation-driven development in high-tech manufacturing," said Zhang Xinghai, founder and chairman of emerging electric vehicle maker Seres.
Zhang said that since its founding, the company has poured over 10 percent of its total revenue each year into R&D of core technologies and set up an R&D team of over 3,000 personnel in both China and the United States.