Fortune 500 Chinese companies are large, but not strong
The Fortune magazine has recently released the latest list of the top 500 companies in the world, which attracted extensive attention. Among them, 79 are Chinese enterprises, outnumbering Japan for the first time.
On the one hand, it is the huge achievment brought by the development of Chinese economy.
On the other hand, Chinese enterprises are large-scale, but not strong.
They must compete with companies of the same industry worldwide. The direct challenge facing China is how to transform from the world-class scale to the global operation.
Chinese enterprises' edging in the Fortune 500 demonstrated that they are gradually reaching the world-class scale.
However, the director of Beijing New Century Academy on Transnational Corporations Wang Zhile said that some Chinese enterprises have indeed surpassed many old brand transnational corporations in size but most of them are not real transnational corporations, let alone world-class corporations.
"These Chinese enterprises lack the capability of covering the global market and absorbing and integrating global resources," Wang said.
The survey result of McKinsey & Company showed that Japanese enterprises almost did not make any progress in the process of globalization from 2006 to 2009. The insufficient level of globalization not only directly affected the profits of Japanese enterprises but also was an important reason for Japanese enterprises to drop out of the world's top 500 enterprises.
Even the Industrial and Commercial Bank, which has the strongest ability to absorb capital in China, has an overseas income accounting for about 3.5 percent of its overall income, let alone the resource and monopoly enterprises, which have a lower level of internationalization.
A professor of accounting at Dongbei University of Finance and Economics Chi Guohua pointed out that the operating revenue reflects the sales volume of a company, so a large company does not means strong.
Among the Fortune 500 companies this year, 58 enterprises run at a loss, accounting for more than 10 percent. Some enterprises even have an astonishing amount of loss. Obviously, these companies cannot be said "strong", the professor said.
Many of the Fortune 500 companies are not satisfactory in the performance forecast released in succession.
The performances of Hebei Iron and Steel Group, Sha Gang Group, Wuhan Iron and Steel Group and Shougang Group are estimated to drop sharply. Aluminum Corporation of China has forecasted a whole-year loss and Anshan Iron and Steel Group Corporation even disclosed a nearly 2 billion yuan of loss in the first half of this year.
In addition to metal industry, the power industry is another field suffering a heavy loss. Among seven electric companies on the list of Fortune 500, four suffered a loss.
These facts have proved that "large" does not mean "strong."
Although many Chinese enterprises have edged in the world's top 500 companies, few are service and retail industries, but the European and American countries have been ranking among the best in the Fortune 500 in the service and retail industries. No any Chinese enterprises demanding a core technology, such as electronics, pharmacy and aerospace, are on the list of Fortune 500.
Secretary-general of the Brand China Industry Association Wang Yong said that Chinese enterprises develop themselves mainly relying on increasing input and few are by means of enhancing technological efficiency.
In an era of decreasing natural resources, the extensive-form development model is unsustainable. China has moved to an era of developing itself with technology and it is no time to delay to Chinese enterprises about the technological upgrading and transforming, Wang said.
On the other hand, Chinese enterprises are large-scale, but not strong.
They must compete with companies of the same industry worldwide. The direct challenge facing China is how to transform from the world-class scale to the global operation.
Chinese enterprises' edging in the Fortune 500 demonstrated that they are gradually reaching the world-class scale.
However, the director of Beijing New Century Academy on Transnational Corporations Wang Zhile said that some Chinese enterprises have indeed surpassed many old brand transnational corporations in size but most of them are not real transnational corporations, let alone world-class corporations.
"These Chinese enterprises lack the capability of covering the global market and absorbing and integrating global resources," Wang said.
The survey result of McKinsey & Company showed that Japanese enterprises almost did not make any progress in the process of globalization from 2006 to 2009. The insufficient level of globalization not only directly affected the profits of Japanese enterprises but also was an important reason for Japanese enterprises to drop out of the world's top 500 enterprises.
Even the Industrial and Commercial Bank, which has the strongest ability to absorb capital in China, has an overseas income accounting for about 3.5 percent of its overall income, let alone the resource and monopoly enterprises, which have a lower level of internationalization.
A professor of accounting at Dongbei University of Finance and Economics Chi Guohua pointed out that the operating revenue reflects the sales volume of a company, so a large company does not means strong.
Among the Fortune 500 companies this year, 58 enterprises run at a loss, accounting for more than 10 percent. Some enterprises even have an astonishing amount of loss. Obviously, these companies cannot be said "strong", the professor said.
Many of the Fortune 500 companies are not satisfactory in the performance forecast released in succession.
The performances of Hebei Iron and Steel Group, Sha Gang Group, Wuhan Iron and Steel Group and Shougang Group are estimated to drop sharply. Aluminum Corporation of China has forecasted a whole-year loss and Anshan Iron and Steel Group Corporation even disclosed a nearly 2 billion yuan of loss in the first half of this year.
In addition to metal industry, the power industry is another field suffering a heavy loss. Among seven electric companies on the list of Fortune 500, four suffered a loss.
These facts have proved that "large" does not mean "strong."
Although many Chinese enterprises have edged in the world's top 500 companies, few are service and retail industries, but the European and American countries have been ranking among the best in the Fortune 500 in the service and retail industries. No any Chinese enterprises demanding a core technology, such as electronics, pharmacy and aerospace, are on the list of Fortune 500.
Secretary-general of the Brand China Industry Association Wang Yong said that Chinese enterprises develop themselves mainly relying on increasing input and few are by means of enhancing technological efficiency.
In an era of decreasing natural resources, the extensive-form development model is unsustainable. China has moved to an era of developing itself with technology and it is no time to delay to Chinese enterprises about the technological upgrading and transforming, Wang said.
