Wealth of China's private enterprises rising rapidly

16:14, May 19, 2011      

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The Bank of Communications of China published a report regarding the wealth creation and management of China's private enterprises on May 16. The report shows that while the private enterprises of China continue to make contributions to the GDP and create jobs, their wealth is also increasing rapidly.

Over the past 10 years, the wealth growth rate of China's private enterprises was higher than that of both state-owned and foreign-funded enterprises, except during the financial crisis period of 2008 and 2009. How to better manage the rapidly increasing wealth has become an important issue for private enterprises and financial institutions, according to the report.

Data shows that the average annual turnover growth rate of China's private enterprises was more than 12 percent and their average annual profit growth rate was nearly 18 percent between 1998 and 2010, both of which was higher than the GDP growth rate for the same period.

As China's economy grows rapidly, the number of Chinese enterprises on the list of the world’s top 500 enterprises is also increasing, and these firms are improving in quality. The number of Chinese firms that rank among the top 500 in the world increased from only three in 1995 to 54 in 2010.

Their rankings have also continued to climb. The percentage of the total income of Chinese companies among the world’s top 500 firms to the total income of all 500 enterprises also increased from only 0.4 percent in 1995 to nearly 9 percent in 2010. Based on a conservative estimate, the number of China's enterprises ranked in the word’s top 500 will reach 75 in 2012 and most likely exceed 100 by 2014.

Meanwhile, the personal wealth of China's private enterprise owners is also increasing rapidly. According to Rupert Hoogewerf's rich list, there were 60,000 Chinese with a personal wealth exceeding 100 million yuan and 200 Chinese with a personal wealth exceeding 10 billion yuan in 2010. Of the top 200 richest people, private enterprise owners accounted for 95 percent.

The average annual personal wealth growth rate of the top-50 richest people on Hoogewerf's Rich List 1999-2000 was as high as 53 percent and the annual personal wealth growth rate of the 50th person on the list was as high as 62 percent, notably higher than that of other rich people around the world.

By the end of 2010, the per capita GDP of China had exceeded 4,000 U.S. dollars. According to international historical experience, when the per capita GDP of a country exceeds 3,000 U.S. dollars, the national income of the country will enter a rapidly increasing period.

According to the latest statistics by the International Monetary Fund (IMF), the per capita GDP of China will exceed 8,000 yuan by 2016, realizing a "doubled" national income. In that period, the wealth growth rate of China' private enterprises will definitely surpass that of the national income. China's private enterprises will continue to be the forerunners in wealth growth.

By People's Daily Online

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