The country's top 500 giants are narrowing gap with foreign counterparts, but they still lag behind, the China Enterprise Confederation announced in its release of the 2008 Top 500 Chinese enterprises list on Saturday.

According to the report, the total revenue of the top 500 Chinese enterprises reached 2.99 trillion U.S. dollars (1 dollar=7.3046 yuan, calculated under the exchange rate in 2007), profits 188.4 billion U.S.dollars and assets 8.17 trillion U.S. dollars.

Revenues were equivalent to 12.67 percent of the global top 500, profits equaled 11.85 percent and assets 7.79 percent, compared with 10.7 percent, 6.5 percent and 7.8 percent respectively last year.

Analysts said the growing proportion of revenue and profits indicated that Chinese companies had become more competitive and profitable.

Confederation deputy president Li Jianming said the country's growing economy had benefited these enterprises in spite of price hikes for oil and other materials.

He also said private enterprises had grown more robust and capable of taking in advanced technology and management from world giants. They accounted for about a fifth of the country's top 500 enterprises.

In addition, their rising investment in research and development and their emphasis on exploring the domestic market increased competition. The growth rate of net profits of the country's top 500 was 19 times faster than that of the world's top 500.

However, another confederation deputy president Wang Jiming said Chinese enterprises still fell behind in innovation, investment in research and development, and the ability to operate internationally. It would take a long time to catch up.

Only 39 enterprises reported overseas sales income of more than 30 percent of the total revenue. Research and development spending accounted for only 1.32 percent of their total revenue, compared with the international average of 3 percent to 5 percent.

Poor supply chain management also lagged behind. Logistics cost still accounted for much of the total output, twice that of the world average. Haier and Huawei were among the few enterprises that paid adequate attention to supply chain management.

Sinopec Corp, Asia's top oil refiner, retained top spot for the fourth straight year on the Top 500 Chinese Enterprises list with its business revenue exceeding 1.2 trillion yuan, (175.2 billion U.S. dollars), the China Enterprise Confederation (CEC) said on Saturday.

The oil giant was followed by the State Grid and PetroChina Company.

The top 500 companies paid taxes of 1.74 trillion yuan, accounting for 35.2 percent of the national tax revenue.

Baosteel Group Co. and China FAW Corporation and Hongfujin Precision Industry (Shenzhen) Co. held the top three positions in manufacturing sector.

The State Grid Corp. of China, the Industrial and Commercial Bank of China and China Mobile ranked the top three in the service sector.

(Xinhua News Agency August 31, 2008)