SHANGHAI - Private companies in Shanghai still have a long way to go to compete with foreign or State-owned companies, despite their fast growth, officials and researchers said.
The city revealed a list of the top 100 private enterprises in Shanghai on Saturday, a move to encourage more such firms to the city.
The ranking list, the first of its kind published by Shanghai Enterprise Confederation and Shanghai Entrepreneurs' Association, showed that these companies realized a total net profit of around 20 billion yuan ($2.94 billion) in 2009, when their total operating income stood at 269 billion yuan and assets at 274 billion yuan.
"Large- and medium-sized private enterprises are playing a more and more important role in the city's economy," said Hu Maoyuan, head of Shanghai Enterprise Confederation and Shanghai Entrepreneurs' Association.
Fosun High Technology (Group) Co Ltd, founded by one of China's richest men, Guo Guangchang, topped the list with an operating income of 36 billion yuan in 2009.
That compared with the average operating income of 2.7 billion yuan made by the top 100 businesses.
The report also showed that these enterprises employed a total of 234,000 people and made 12.4 billion yuan in tax payments last year.
"Private companies in the city still have a long way to go as only a fraction of them are among the top 100 private companies nationwide and their contribution to the city's GDP is very limited," Hu said.
Analysts say private companies in China have a good opportunity to get stronger after a central government guideline published earlier this year aimed at encouraging more private companies and funds to enter more profitable monopoly sectors, such as railway construction and oil exploration.
"Policy constraints are fading and private companies in the country will become more important to China's economy in the long term, as suggested by the guideline," said Fu Xinhua, deputy head of Shanghai Municipal Economic and Infomatization Commission.
"But it will take time for the government and private companies to find ways to implement the guideline," he said.