Looking at the Trend of China's Manufacturing Industry from the Five Key Terms

Recently, the China Enterprise Confederation and the China Entrepreneurs Association released the list of 2011 Top 500 Chinese Manufacturing Enterprises. The three companies of China Petroleum & Chemical Corporation, Dongfeng Motor Corporation, and Shanghai Automotive Industry Corporation (Group) Corporation occupied the top three positions with a total of 1,969 billion yuan, 368.8 billion yuan, and 367.2 billion yuan respectively. China First Automobile Group Corporation, China Ordnance Equipment Group Corporation, China Minmetals Corporation, China North Industries Group Corporation, Hebei Iron and Steel Group Co., Ltd., and China Aviation Industry Corporation rank among 4 to 10 companies.

"Growth," "mergers, acquisitions," "research and development," "concentration," and "advancement of the people," are the top five key words highlighted by the top 500 Chinese manufacturing companies in 2011. From this we can also see the future trend of China's manufacturing industry.

One of the keywords: growth.

In 2011, the top 500 Chinese manufacturing companies’ operating income reached 17.8 trillion yuan, an increase of 34.61% compared to 13.2 trillion yuan in the previous year. The total assets of enterprises reached 16.7 trillion yuan, an increase of 22.35% compared to the previous year. Employment reached 1.15 million, an increase of 8% over the previous year.

Judging from the three indicators of employment, total assets, and sales, the overall size of the short-listed companies has increased from the average, the median, and the total. The proportion of total assets and sales to GDP has increased year by year, and the ratio of employed people to the total number of employed people in the country has basically stabilized at the level of 1%. Wang Jiming, executive vice president of the China Enterprise Confederation, said that it can be seen that the expansion of the company's size is in a capital-intensive direction, without bringing a greater proportion of employment.

The second keyword: mergers and acquisitions.

As an important way for the rapid growth of modern enterprises, mergers and acquisitions have become an important imprint of companies that have been shortlisted this year. Wang Jiming said that the M&A activities of short-listed companies are relatively frequent. During the past three years, there have been 336, 411, and 313 mergers and acquisitions respectively. Each company has experienced two or three mergers and acquisitions, mainly through the form of subsidiaries. In terms of scale, it can be seen that the number of subsidiaries in the short-listed companies is increasing, and the speed is higher than that of subsidiaries and stock-holding companies. However, Wang Jiming also reminded that in the face of M&A wave, enterprises should pay attention to the risks in the M&A process. The government should regulate the M&A activities of companies, especially cross-border mergers and acquisitions.

Keyword 3: R&D.

The average value of R&D investment in the short-listed companies has increased from 550 million yuan in the previous year to 710 million yuan, an increase of nearly 30%; the average number of patents has risen from 128 to 681, an increase of more than four times, indicating that the number of patents of the finalists There has been a noticeable increase. However, the distribution of invention patents among the short-listed companies is still uneven, and the R&D density has declined in recent years. Large-scale manufacturing in China still faces the problem of insufficient R&D.

Keyword 4: Concentration.

Focus on the east from the geographical distribution. According to the released data, there are 368 companies in the eastern region, accounting for 73.6%, an increase of 23 over the previous year. The advantage of the eastern region continues to increase, showing obvious regional agglomeration characteristics.

From the perspective of business operations, it focuses on the main business and lacks diversified operations. According to the data provided by the short-listed companies, the proportion of the main business income of the short-listed companies to the total revenue has reached about 80%, indicating that the short-listed companies are still mainly based on their main business, and the degree of centralization of their operations is relatively high, and the main business is comparatively Clear, basically based on specialized operations. Wu Rong, deputy director of the Research Department of the China Enterprise Confederation, said that although this approach allows companies to concentrate their resources on developing their own long-term projects, which is conducive to economies of scale, it is not conducive to the use of economies of scale, and companies can consolidate their main business advantages. At the same time, diversification operations are carried out appropriately.

From the perspective of market share, it focuses on the domestic market. Most of the short-listed companies' products are used for domestic sales. From the average point of view, the proportion of overseas sales does not exceed 15%. From the median point of view, the export rate does not exceed 10%.

Keyword 5: Democratization.

Similar to the growth of the previous year, the number of the top 500 Chinese private manufacturing enterprises in the manufacturing industry continued to increase from 275 to 281 in 2011, showing the strong growth potential of private enterprises in the manufacturing sector. This is basically the same as previous years. Consistently, the number of state-owned enterprises continued to decline, collective enterprises showed a slight trend, and they were gradually squeezed out of the top 500 manufacturing industries. The analysis also shows that between 2004 and 2010, the profit margin of private enterprises was higher than that of state-owned and state-controlled enterprises. Qi Rong said that the development of private enterprises will create a competitive market environment for state-owned enterprises, and effectively promote the development of manufacturing and the entire economy.

It is worth noting that the top 500 companies in China's manufacturing industry in 2011 have not only enjoyed a significant increase in operating income, total assets, owners' equity, profits, and thresholds, but also have higher growth rates for each indicator than 2011. Top 500 Chinese companies. Wang Jiming said that this fully demonstrates that under the background that China’s economy has taken the lead in recovering most of the world’s economies, domestic manufacturing companies have achieved rapid growth.