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HEFEI, Anhui - The profitability of China's top 500 enterprises surpassed their United States counterparts for the second consecutive year as China's economy is experiencing a faster recovery from the global financial crisis.
The average profit margin of China's top 500 enterprises, a key indicator of a company’s profit-making capability, was 5.44 percent in 2009, higher than the average of 4 percent for the US companies, according to the latest report released on Saturday by the China Enterprise Confederation (CEC) and China Enterprise Directors Association.
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The total revenues of China’s top 500 enterprises in 2009 stood at $4 trillion, accounting for 41.4 percent of the total revenues of American companies. The top 500 Chinese enterprises also reported a 29 percent surge in net profits to $220.2 billion last year.
The latest report also reflected the negative impact of the global financial crisis on China’s top 500 enterprises in 2009 as 99 companies saw decline in revenues as demand from global markets weakened significantly due to the financial crisis.
Enterprises in the sectors of steel, trade and logistics are among the worst hit companies, according to the report. Overseas revenues of China’s top 500 enterprises stood at $367.6 trillion, a 3.42 percent decline from a year earlier.
But Chinese private enterprises are rising rapidly driven by high technology and innovation as Huawei Technology Co Ltd, a telecommunication equipment producer recently leaped into the world’s top 500 enterprises club as the only Chinese private enterprise.
"Although private enterprises only account for one third of China’s top 500 enterprises in terms of the number, their competitiveness and profit-making capability are growing fast and boasts great potential,” Li said.
He expected more companies in the emerging industries such as consumer services and alternative energy to join the top 500 club next year while construction and the real estate industry will see a declining trend.
China Petrochemical Corp, also known as Sinopec, Asia’s leading refinery, topped the top 500 revenue list for the fifth consecutive year with 1.39 trillion yuan in 2009.