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Chinese top 500 companies need time to top global rivals

BEIJING, Sept. 8 (Xinhua) -- A domestic report released last week shows profits of the top 500 Chinese companies outperformed their U.S. counterparts for the first time last year, but experts say they believe these companies still need time to top their global rivals.

They agree Chinas top 500 companies need more time to become really strong players in international markets.

The report, presented by the China Enterprise Confederation and China Enterprise Directors Association, shows net profits of Chinese companies last year were 170.6 billion U.S. dollars, while the figure for U.S. companies was 98.9 billion U.S. dollars.

Profits for the Chinese heavyweights were down 12.4 percent from a year ago, but that was compared to a 84.67 percent drop for U.S. companies, which had their worst decline in 55 years, according to "Fortune" magazine.

Chinas top 500 companies rankings are based on their sales revenues.

CEC vice president Wang Jiming said the result did not mean Chinas top 500 companies had made substantial improvements in overall power to compete against their U.S. counterparts.

It only suggested U.S. companies suffered worse setbacks from the global financial crisis than their counterparts in China.

He said Chinese enterprises enjoyed relatively better policies and domestic market environment.

Qin Xiaobin, an analyst with the China Galaxy Securities Company Limited, said although the top 500 Chinese companies outperformed in net profits their U.S. counterparts, they still lagged behind in overall competence, technology, innovation, product structures and corporate management.

Qin also said relatively better economic growth in China had helped to provide a good environment for the development of Chinese companies.

Li Rongrong, director of the State-owned Assets Supervision and Administration Commission, the countrys SOE watchdog, said Chinas top 500 companies were big, but not strong.

Zhuang Jian, senior economist with the Asian Development Bank told Xinhua he agreed with Lis remarks and raised concerns about Chinese companies development sustainability.

Given a level playing field in international markets, Zhuang asked if Chinese companies would still be able to achieve satisfactory profits, given most of Chinas top 500 companies were State-owned, usually in monopolized industries.

The report shows less than one fifth of Chinas top 500 companies are privately-owned, and their sales revenues comprised less than 10 percent of the total.

State-owned Sinopec, Asias top oil refiner, topped the list with revenue of 1.46 trillion yuan (about 214 billion U.S. dollars).

China National Petroleum Corp (CNPC), the nations largest oil producer, with revenue of 1.27 trillion yuan, came second, followed by the State Grid Corporation of China with 1.14 trillion yuan in revenues.

Zhuang said Chinas private companies played an important role in employment, but their presence was limited.