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Fortune 500 Chinese companies are large, but not strong

(People's Daily Online)

08:41, August 09, 2012

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.

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