Fortune 500 list reveals need for structural reform

WUHAN - Nearly 100 Chinese companies made this year's Fortune Global 500 list released earlier this week, but a closer look at the companies reveals problems that have long plagued China.

Ninety-five Chinese firms joined the ranks of the world's top companies, measured by their revenues in recent fiscal years.

China added 16 more companies to the list, narrowing the gap with the United States, which boasted 132 corporations this year.

Chinese companies accounted for 17 percent of the total revenues grossed by the top 500. This compares with 28 percent, or $8.6 trillion, logged by US companies.

However, Chinese firms on the list are mostly focused in traditional industries such as steelmaking, power generation, energy and chemicals -- sectors that are either grappling with overcapacity or are dominated by State-owned enterprises (SOE).

China's unbalanced economic structure is evident in the ranking.

"Very few Chinese companies on the list come from high-end manufacturing, the service industry or the technological sector," said Zhuang Ziyin, a professor with the Institute for Advanced Studies at Wuhan University.

Meanwhile, nine Chinese banks made the cut, followed by eight from the United States. The Industrial and Commercial Bank of China retained its spot as the world's largest bank, with its 2012 revenues reaching $133.6 billion.

However, profits earned by nine banks, four insurance companies and 13 financial firms from China account for a whopping 56.5 percent of all the profits posted by 95 Chinese firms.

This suggests weak profitability for businesses in the real economy amid a global downturn and domestic structural woes.

China's economic growth slowed to 7.7 percent in the first quarter and a string of weak data released recently has pointed to milder expansion in the second quarter.