Why list of China top 500 companies change so fast?

China Enterprise Confederation and China Enterprises Directors Association (CEC-CEDA) released its China top 500 for 2004. 101 new names were included in the list compared with the list for 2003 when 112 businesses were replaced by new comers. The significant changes have aroused concern.

As the list is based on the operation revenue of companies, some experts even question the credibility of the list. They argue that given different ways of development due to variables of industries, trades and products, a single benchmark like operation revenue can hardly indicate more important factors like economic benefits and core competitiveness. This indicator stressing too much on the scale of a business is not positive to the healthy development of Chinese enterprises.

That, opponents say, explains why so many companies have failed to secure their positions on the top 500 list though their operation revenue for a certain year was up to the criteria. Their benefits and core competitive were not.

But other experts do not agree. They stress the fact that competition is particularly fierce in the initial stage of the development of China's market economy. In most sectors, business especially those in highly market-oriented or industrialized industries have not got relatively stable positions in the market. This leads to their ever changing places in the market.

Professor Yong Du from Renmin University said that the top 500 list is very helpful in understanding the rules of the growth of Chinese enterprises, especially those giants. Though it is not easy to know every Chinese company, an understanding of the biggest 500 gives us a clear idea about the real situation of the development and prospect of Chinese businesses.

Chen Qingtai, an official from the Research Center under the State Council, agrees it is nice to be one of the top 500. But he also stressed that a position on the list was the natural result of improvement of competitiveness. On the other hand, attention should also be paid to small businesses which are very important for the healthy development of many industries.

By People's Daily Online