SHANGHAI - Chinese companies need to improve their competitiveness and increase efficiency and asset quality, instead of only focusing on expansion, a research organization said.
Shen Hanyao, president of Warton Economic Institute (WEI) in Shanghai, which has published a report about the profitability of the top 100 listed Chinese companies for 10 years, said 1.77 trillion yuan ($273 billion) in gross profits were reported by the top 100 Chinese companies in 2010, an increase of 45.3 percent on 2009.
Industrial and Commercial Bank of China ranked first with annual pre-tax profits of 215.4 billion yuan in 2010. PetroChina Co Ltd and Construction Bank of China ranked second and third in this report.
Figures from WEI suggested those 100 companies contributed 77 percent of the profits among all listed companies in China, a year-on-year increase of 3 percent.
Shanghai, Beijing and Shenzhen remain the top business destinations for public companies. A total of 59 companies have headquarters in the three cities.
As a result of the economic stimulation policy promoted in central China, more businesses from the region appeared on the list. The number of companies from central China increased from 18 in 2009 to 21 in 2010.
The service industry also played an important role in boosting the profitability of companies in recent years. The tertiary industry contributed 61 percent of the profits for the 100 companies in China. The industry has undergone rapid development process in recent years. Statistics show that more than 50 percent of workers were engaged in the service industry in 2009.
Although Chinese companies have shown high profitability in recent years, entrepreneurs are facing criticism for not undertaking enough corporate social responsibility. Many well-known Chinese companies have been caught up in environment pollution and food safety scandals. Some observers say businesses should be aware that social responsibility is not limited to charity work but has a wider role.
