A new benchmark for corporate success in China has just been set.
The latest ranking of the nation's top private companies is out, and the bar for entry is now a staggering 27 billion yuan in revenue.
That's about $3.8 billion.
This isn't just a list.
It's a story of resilience, ambition on a massive, massive scale.
We're going to check it out today and find out what it takes to get on it.
We are live from Beijing.
This is Roundtable.
I'm Steve.
Thank you so much for sharing your time with us today.
And on the show, Niu Honglin and Yuxuan.
First on the program.
China has unveiled its highly anticipated 2025 list of the top 500 private enterprises, a key barometer of the private sector's health.
Notably, the minimum revenue threshold for entry has climbed to gulp 27 billion yuan.
That's about $3.8 billion, and that's for 2024.
And it underscores the significant growth and increasing scale of these market leaders.
This development.
If you look at it in a deeper analysis, we have to examine how these Chinese private enterprises have navigated the very, very complex interplay of domestic economic restructuring and also taken into account volatile global environment in recent years.
So how have they done it?
How have they gone through this kind of transformation of remarkable development?
Is it just non-stop innovation?
Is it supportive government policies?
Is it a unique ability to stay agile in a tough business culture?
Or perhaps it's all three of those things and many, many more.
So, Yonglin and Yusheng, good afternoon to you both.
Is this a year, or is this a thing that comes out every single year, or is this brand new?
This 2025 list of the top 500 private enterprises.
Yeah, this list thing is definitely not new at all.
So this actually is called by a conference.
It's called the China Top 500 Private Enterprises Conference.
And it is, as we say, the highest level, largest scale and the most influential brand event organized under the leadership of the all china federation of industry and commerce.
And this is not the first time, because it has been held 14 times, and each year it releases the rankings of the top 500 private enterprises and also some other rankings, like top 500 manufacturing enterprises, top 100 service enterprises in china.
Also, some reports, like analysis and research on these industries will also be released.
This would be a big deal for private sector businesses.
Because to make it onto this list would be one of the greatest accomplishments your company could ever achieve.
I don't know why I'm thinking of the Premier League soccer.
Oh, I do.
Because people like to compete and Chinese people...
I'm not going to say especially, but we kind of like to see the rankings.
We like to know who's doing well in this area.
That, and I think in the Premier League, you can join a higher group of teams, right?
And then you get into that group and the fans go crazy.
But then if you don't perform well, you don't find yourself in that group anymore.
I forget the word for that.
I'm not a huge soccer fan.
Anyway, I'm not sure if that's a good analogy or not.
So looking at the list then, What kind of industries or companies are represented on it?
I guess we're looking at a vast array of industry.
Yeah, actually...
Among the top 500 private enterprises, there are like 72 belong to the secondary industry, which means including mining manufacturing, production supply for electricity, gas and water, and also construction.
And then 66% are in manufacturing, which means We've already mentioned manufacturing.
So manufacturing is kind of a big part in the list.
And the total operating revenue of manufacturing enterprises on the list reached 29 trillion yuan, which is an increase of more than 7, accounting for more than 68 of the whole total top 500 companies enterprises.
This is a reminiscent, I guess, of the fortune 500 that that's the one from the United States right, it's?
I think it's exactly the same concept right, where you have the highest revenue generating companies in America, and they rank them by total revenue.
That name, by the way, fortune 500, comes from fortune media.
It's a magazine and media company, and So they have that.
And then they have the Fortune Global 500 because the Fortune 500 is strictly the United States.
But the Fortune Global 500, that's where they rank the top 500 companies in the world.
Actually, 29 companies from this list that we're talking about, the top 500 private enterprises in China were listed in this.
In this year's Fortune Global 500, 29 of them.
Pretty impressive, huh?
If you're curious to know, at the top of the Fortune Global 500 for 2025, Walmart is number one.
Number two, any guess?
Apple?
Amazon.
Amazon, sure.
Apple's number eight, according to this list.
And number three, state grid.
You find that on there as well.
All right, so why do these private enterprises matter so much to the Chinese economy?
I mean, I think it's kind of self-explanatory, but let's talk about that a little bit.
Yeah, it's always been the kind of main force in a lot of these industries, right?
And it plays a very pivotal role in stabilizing economic growth and also creating job opportunities, because a lot of people are working in these areas and industries, also bolstering technological innovation.
And some data are showing that these companies currently contribute more than 60 of the nation's GDP.
Oh yes, there's this idea of 56789.
I'm not only counting, I'm talking about the figures here.
They say that 50% of the tax revenue are from the private sector.
60 of GDP, like Yusheng has said, 70 of technological innovation, 80 of urban employment and 90 of enterprise numbers.
So the total number of enterprises in China, 90% of those are within the private sector.
And I know that for a lot of people would believe that the state sectors are with the major innovation power, but private sectors are also very important.
80%, yeah, 80% of urban employment goes to the private sector.
Obviously, really, not just important, essential, essential to the economy, right?
So then, if we analyze this list a little bit more, what do these rankings say about China's private enterprises?
I mean...
We talked about it, didn't we?
That the new benchmark, the new standard to get on the list at all is up to 27 billion yuan, almost 4 billion for 2024.
So obviously doing really, really well, a driving force.
Actually, let's say the first two.
Winners on the list, e-commerce giants JD.com and Alibaba climbing the top two spots.
Those are the top two?
The release data showed that, amid complex economic conditions, the Chinese private sector is leveraging let's say, innovation-driven strategies to demonstrate robust resilience and vitality, achieving some steady growth.
And China has been steadily advancing on the path of research and development, while manufacturing, I think, which means like made in China, right has long been a defining strength.
And today many of these enterprises are also evolving toward a mode of like, designed and created in China, to invest a lot in RD research and development.
This is very interesting.
And also when it comes to the private sector.
It's it feels like it relates to our daily lives a little more.
Don't get me wrong.
For the state companies, for example, they are responsible for the grid power, the power supply.
They're responsible for these.
It sounds like the major things that we kind of rely on in our daily lives as well.
But these private little companies or private, but not that little companies.
I was going to say, they're not that little.
Yes.
They can do things that can very tangibly improve the quality of our lives.
Recently, I am following this short video vlogger and this person.
What he does is that he finds out what are the 20 products on overseas e-commerce platforms and when he found some of those products that are actually made in china or created in china, they would show you the video of those products and tell you where to go and get them.
And believe me when i say i bought a lot of things recommended by this blogger and these little gadgets are very fun and they're innovative and they make my life better yeah, in a tangible way.
Right, You said well, some of these companies might not affect our daily lives, but I think I can say confidently that companies like JDcom and Alibaba absolutely do affect our daily lives.
Those held the top two spots.
Anything else of kind of interest in the top 10?
I wonder if you had a peek at that list.
Oh, yeah.
Actually, among these top 500 private enterprises, What I was seeing is because I focused a lot on why they are becoming some of these companies that you need to put a lot of focus on, RD right.
Because I saw the total R&D expenditure reached 1.3 trillion yuan.
And some of these companies are really, really well known alike.
Huawei, Tencent, Alibaba, BYD, the car company.
Car maker.
Also, Geely Holdings, also a car maker.
Xiaomi, they make basically everything now.
Ant Group, Baidu, Meituan, and CATL, the battery company.
So a lot of these things are, a lot of these companies, I mean, are investing a lot in R&D.
And they put a lot of not only money but also personnel in in these areas, which means a good and a huge, I think, ambition in developing the whole idea of design and creating China.
And another trend we see this year is that, on top of those companies that Yusheng has already mentioned, we are also looking at some companies entering the list.
Then they are not that well known because they do not sell directly to individual consumers.
They are relatively the upper link in an industrial line.
And with the industrial line being improved and being more and more precise, we see these companies are getting into the game as well.
Though they do not relatively produce content or products that we can use, they produce the parts that we need in certain products.
I have a perfect example.
I remember when I was a teenager I went to my cousin's wedding and my cousin was marrying this lovely young lady.
And we went to the wedding and it was like you could tell it was a rich person wedding.
I was like, what's going on here?
And somebody said...
Yeah well, his wife-to-be, her father.
He owns a company that makes the you know, those little rings that your shoelaces go through.
Ah, yes.
Those little metal rings, those little tiny circles, right?
Protecting the holes on the shoe.
Protecting the hole on the shoe.
Oh, wow.
He owns a company, and he's one of the richest people in Canada, apparently.
Yeah.
And I thought... And people manufacture that separately.
Yeah, apparently.
This was years and years and years ago.
But still, my point is those types of companies those aren't customer-facing companies but still play a vital role in industry for sure.
Yeah, and these companies have continued to prove.
You know, back to the list.
They've been growing and growing.
361 companies reported that they had year-on-year revenue growth from 2024.
More specifically, 237 recorded growth rates that exceeded 5%.
161 of them did even better than that.
They recorded growth of over 10%.
And the numbers continue to impress.
There were 105 of these companies that recorded an operating revenue in excess of 100 billion yuan.
And that's eight more companies, not eight more yuan, than the year before.
So really, really impressive.
And, as you mentioned before, some of these companies on the list here in China are on the Fortune Global chart.
500 list as well.
Some good examples you talked about JD.com.
One on the list that I thought was interesting too was Well Hope Foods.
And I had never heard of this company before, but they've been consistently listed among the top 500 enterprises here for many, many years.
That's an agricultural company.
Yeah, the global influential agriculture and also husbandry company registered 743 billion yuan, that's about more than 10 billion US dollars, in operating revenue in 2024, marking an increase of over 4 billion yuan compared to the previous year.
Yeah.
All right.
So when we got started with this chat, I posed some questions.
You know, how are they doing this?
Is it just that they're conducting their business in a very smart way?
Is it policy support?
Let's get into some of the reasons behind the development.
We know it's everything, don't we?
It takes a lot to be this successful and to be able to compete with your peers and with more and more private companies doing better and better.
The benchmark is also rising.
And one thing that we have to mention would be policy and legal support.
We know that the private sector promotion law which was which only took effect on May 20 this year.
It's not a real debut.
It's more like selecting a social opinion, whether or not you have any opinion about it.
Last year, around October 2024, it received a lot of recommendations and suggestions to modify the law, and now it's already in place.
Ah.
And one very interesting thing about this law is that we know there have been a lot of drafting policy documents opinions, suggestions about promoting the development of private companies.
But this one is the very first law.
By making it a law, you have to abide it.
And one interesting point we see is that in the law it very clearly stated that local government have to include the promotion of private companies in their annual plan or annual report, or well, actually both.
So it means that for local governments they have to think about new ways to improve and to encourage the development of the private companies in their area, in their provinces.
And that includes giving them better provincial or preferential policies and signing deal with them.
And even this one specific article i noticed very interesting it's saying that with the change of um different rotation of government, for example, the mayor of the city changed.
It does not affect the treaty you signed with the previous mayor.
It's that specific to protect the um rights and the opportunities of the private companies.
So i, i read, And that this law that you're talking about, and again it's called the private sector promotion law.
And I think you just told us that they took the opinions of companies in the private sector to put this law together.
Yes, they have a draft version.
And when they release the draft version, within several days they've received over 1000 articles of different suggestions and advices and they've took all that into consideration.
So then, I guess that this would remove some of the concerns, I guess, for potential companies entering into the private sector.
Yeah, and these kind of laws and policies are there to address these concerns by removing some market entry barriers and expanding financial channels in the way that private companies may face some concerns like delayed payments from other companies from their investors, buyers or consumers or clients, let's say or market entry barriers and limited access to financing.
We're not only talking about these huge companies, but also these maybe startups and entrepreneurs.
When they're starting up a company.
As we talked about a lot of information on Zhejiang, this province, they support a lot on these high-tech and new technology companies.
And one of the big points is that they support a lot, not only financially, but also in the way that they support a lot of incentives and also policies in the way to help them to grow and to develop.
Well, the major foundation principles in the law are the following four.
First would be equal treatment of private economic entities.
And second, fair competition in the market.
And then equal protection of rights of private companies as well as state-owned companies, and joint development of public and private sectors.
And that idea is that, for example, when the country decided to do search RD in a specific area with a specific object, both state-owned enterprises and private-owned enterprises have the same opportunity to compete for that project.
And winning the project, or winning as someone who can participate in the project, would mean incentives, would mean support from the government, and all that is guaranteed by this law.
That's a big deal.
If you're allowed to compete with state enterprises too on projects, that's going to encourage you.
I mean, that's going to encourage everyone in the company, right?
From the top to the bottom.
And that vice versa, we see with the rapid development in the private sector.
Also when it comes to these major projects.
It's kind of like we also need.
We want the private sector to be able to participate, because sometimes they even have better vitality, they have better research team and better technology.
To ensure fair competition.
Also, equal treatment is the way to help stabilize the expectations and also boost their business confidence.
So another reason policy, a big reason, to support these companies.
Lowering the barrier entry to get involved encourages companies for sure.
I'm thinking too, that tech innovation is another big reason why these companies have benefited and have been able to find themselves on this list.
Definitely, we see the top five private firms invested a total of more than 11 trillion yuan, that is, around 160 billion us dollars, in the rnd expenditures, and also, of the top 500, over 170 companies invested over 1 billion yuan in rnd.
And We know, we've seen all these development results in our daily lives, in the new versions, new generations of the products, in our daily lives.
We see Tencent's sustained advances in cloud computing and artificial intelligence, alongside Huawei's substantial investments in 5G communication technology.
And these are very tangible in our daily lives.
And we can only see parts, because they are also doing the kind of research that are showcased in other forms on top of our everyday products.
So yeah, definitely, I think innovation is one major driver.
There's also a connection between digitalization and green development on this top 500 list as well, and they are proactively accelerating the company's transition towards both.
And I found this to be kind of curious because I wouldn't have thought that those two go hand in hand but 64 almost 65 of the companies have formulated strategic plans for their transformation digitally speaking, and 83 are advancing green and low carbon transition initiatives.
So what that tells me is that, regardless of the industry, a main priority for nearly all of these companies is to do their business in a way that's friendly to the planet.
The one thing is that of course we are seeing a lot of these policies and laws are encouraging companies to do their business more green right.
And another thing is that they are actually using these policies or incentives to change the strategy of their company as a whole.
Because I visited some of these power...
Electricity powering companies to they were burning actually household waste instead of these, like old energy resources, like coal and fossil fuel, that kind of thing, and which means they this is a kind of a greener way to generate electricity and they are using the waste, which means that, Which literally, they are waste, right.
They are using the waste to generate profits.
So I think this is a way that a lot of these companies are going to in the future when they are considering green development is a big part in their future plan.
Turning garbage into gold.
Yeah.
Literally.
Exactly.
Literally.
Exactly.
How about on a global scale?
You know we talked about here in China, but examples of companies going global and the things that they need to focus their efforts on.
Of course we talk a lot about some of these companies are doing so good domestically and I think of course they will consider a next step of going global and having a global vision and mindset is one of the biggest or most important things that they need to consider.
One example is I think I've seen a lot of interviews of them from the very, very famous toy Labubu.
The company is called PopMart.
Yeah, so Wanning, who is the CEO of PopMart, actually illustrated that their vision before they were trying to become the Disney of China.
And now they hope to become the Pop Mart of the world.
So that kind of transition actually, I think... It makes a lot of sense.
Instead of following the pattern of a super successful company that has the lion's share in the industry.
You realize, at the end of the day, you have to be yourself, you have to be the only the first version of yourself instead of the second one of somebody else.
Yeah, and the way they do it is by integrating the ideas from all around the globe that they that's their mantra kind of from the world to the world, meaning originating from the world they, and then then going back to the world.
Because the artists, Because the toys we call them like artists, artist toys or designer toys, right?
So the artists they work with come from across the globe and then, through China's manufacturing strength and market foundation, they incubate global artists and then bring them back to the world stage, which is their vision to truly build a world-class designer toy platform.
Globalization is one thing.
Localization is another thing.
Many of these private companies, they find another market that is a total blue ocean just like that.
And you enter the market and realize that you have to produce and create content or a product that is suitable for the local market.
And that is another strategy many of these companies are going.
Yeah.
And sometimes you do it by knocking on the door softly and sometimes you break the door down.
And I'm thinking of Luckin Coffee opening in New York City.
I think it's two doors down from Starbucks.
I love it.
They're saying, not just saying we're here, they're screaming at the top of their lungs.
We're here too, and we're a big player in this game.
Final question, I guess, that we can talk about before we finish up this one today.
Challenges.
I guess that might hinder the globalization of private companies as they try to expand beyond the borders of China.
Yeah, it's easy to say, we want to go global.
We want to include all the suggestions from around the world to the development strategy of our company.
But when doing it, there are too many factors to take into consideration.
Same goes to localization.
You have to study the market and be able to find your strategy.
Sometimes you have to be allowed into the market at a fair price as well.
That's important too.
Congratulations to all of those 500 companies that found their way on to the biggest list of the year.
We have to wait another 12 months to find out who's going to be on the next one.
Exciting.
Very exciting.
And some of the companies were new to this list this year as well.
They're probably still partying as we speak, I would think.
