China Inc. boasts some of the biggest corporate names in the world today: China Mobile Ltd., PetroChina, Industrial & Commercial Bank of China Ltd, just to name a few. But while the commanding heights of the world’s second-largest economy are still firmly in the hands of China’s state-owned enterprises, who are the overachievers in the private sector?
Two recent surveys try to answer that question. On Wednesday the China Europe International Business School released its eighth annual list of China’s top 100 private listed companies, after surveying the 2010 operating revenue of 1502 firms listed in Hong Kong, the U.S. and mainland China. And in late August the All-China Federation of Industry and Commerce issued its 2011 edition of China’s top 500 private enterprises, also ranked by operating revenue (pdf in Chinese).
The definitive word on who is the greatest of them all probably goes to the ACFIC, a quasi-government industry group. With the private sector’s great and good – many of whom are closely held – among its members, it can get the inside word on how much private firms are actually making. Still, some firms are notably absent from the list such as banks and financial institutions.
Ping An Insurance (Group) Company of China Ltd., which tops the CEIBS survey, doesn’t make an appearance on the ACFIC list. Instead ACFIC ranks telecommunications-equipment maker Huawei Technologies Co. as top dog, although its private status has been questioned by governments in the West wary of its seemingly close relationship with Beijing. Steelmaker Jiangsu Shagang Co. Ltd. comes in at number two on the ACFIC list, and electronics and home appliance retailer Suning Corp. comes in third.
CEIBS ranks Suning’s listed unit, Suning Appliance Co. Ltd, second.
The CEIBS survey is limited in that it only looks at listed firms, but its value comes in comparisons it makes with listed state-owned firms. According to CEIBS, China has 8.4 million private enterprises accounting for 74% of the country’s total number of firms. But if the earnings of publicly traded firms are anything to go by, state-owned firms still dwarf the private sector in size with the average listed private company generating only about 25% the total net profit of an average listed state-owned firm. However, private firms saw faster revenue growth as a group — 21.46% against 18.88% for state owned firms.
The thing that jumps out from both lists is the number of names from the consumer and retail sectors, areas in which state firms play less of a role. Home appliance makers Qingdao Haier Co. and Gd Midea Holding Co., and dairy producer China Mengniu Dairy Co. made the top 20 of the CEIBS list, and car company Zhejiang Geely Holding Group Co., food processor Yurun Group and beverage maker Hangzhou Wahaha Group Co. were in the ACFIC’s top 20.
Few are household names outside of China yet. But as a primer on the Chinese brands that could one day be advertising on television screens and magazine in Europe and the U.S., the lists offer an interesting snapshot.