Private firms spur high-quality economic surge 
2019-08-28
With sound development and greater innovation, private businesses have played a bigger part in China’s pursuit of high-quality economic growth.
The total revenue of China’s top 500 private companies reached 28.5 trillion yuan (US$4 trillion) in 2018, up by 16.44 percent year on year, according to a report released by the All-China Federation of Industry and Commerce last week.
Their total assets and net profits after tax also registered double-digit growth year on year, said the report.
Huawei peaked the 500 list with a revenue of 721.2 billion yuan in 2018. Top companies also include Suning, JD.com, and Legend Holdings.
To be listed, an enterprise needed to have revenues exceeding 18.59 billion yuan last year, higher than the 2017 threshold of 15.69 billion yuan.
A total of 20 private firms were also on the list of the world’s top 500 companies, three more than last year.
Amid complex international and domestic conditions since last year, private enterprises have maintained a momentum of stable growth despite various risks and challenges, said Xu Lejiang, executive vice chairman of the ACFIC.
The private sector is important in the economic system, contributing more than 50 percent of tax revenue, 60 percent of GDP, 70 percent of technological innovation, 80 percent of urban employment and 90 percent of new jobs and new firms.
In many sectors, private firms have become leading innovators, fueled by hefty R&D investment and a pioneering spirit in exploring new products and business models.
In the current industrial revolution powered by digital technologies, many Chinese firms are participants, promoters and in many sectors even bellwethers, said Xu.
Retail conglomerate Suning Holdings Group has long benefited from its early foray into online retailing. Building on such strength, the company launched a plan to develop smart retailing, with the goal of becoming a Chinese combination of Walmart and Amazon.
Since the plan started in late 2017, Suning has opened about 10,000 smart retail outlets across the country, a speed rarely seen in the industry.
China’s private firms have also been active in increasing their global presence and seizing overseas business opportunities.
In 2018, 241 private enterprises on the top 500 list invested in 2,345 overseas programs, with total revenue of about US$815 billion from overseas, according to the ACFIC report.
Private enterprises contributed more than half to China’s foreign trade growth in 2018, a bright spot of China’s foreign trade development, Li Kuiwen, spokesman of the General Administration of Customs, said earlier this year.
Partly due to insufficient credit support and limited market access, China’s private enterprises have for a long time seen more difficulties in their development, compared with state-owned enterprises.
In recent years, China has taken various measures to promote private economy, including tax and fee cuts, expanding market access, streamlining approval and licensing procedures, as well as better financing.
A high-level symposium held in November, along with supportive policies unveiled afterward, has shored up private entrepreneurs’ confidence.
