Economy

Behind the No.1 tag

By Gao Qihui (Chinadaily.com.cn)
Updated: 2010-06-02 17:00

China has reaped many No.1 titles: No.1 auto market, No.1 foreign exchange reserves holder. Now, a Chinese company has just been labeled as the world's most valuable - PetroChina has taken the top spot on the FT 500 list.

All of this may create the impression that China will become the No.1 economy in the near future. As Nikkei News reported recently, Japanese government predicted that China would overtake the US as the biggest economy by 2030. Consequently, some people argue that we should make preparations for leading the world and assume more international responsibility. However, the optimistic figures always cover up the underlying authentic truth, which demonstrates how far China is from the real No.1.

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Even while PetroChina is shining on top of the most-valuable list, it is facing criticism from the Chinese people for its undeniable monopoly status, which helps bolster it up to the top position.

Its profits, mainly generated from the domestic market, were only one-third of Exxon Mobil in 2008, although it co-monopolizes the big cake of China's enormous market with two other giants- Sinopec and CNOO, all of which are state-owned enterprises. The label of most valuable is not equivalent to the most competitive and efficient.

It may be more heart-stirring that China's auto output reached 13.79 million in 2009, overtaking the US as the biggest auto market. However, under that glory figure, the sales volume of self-owned Chinese brands shared only 44 percent of the passenger car market and 30 percent of the sedan market in 2009. China's auto market is still dominated by the joint-venture companies that gain the edge of quality with imported technology from their foreign parent companies, such as Shanghai-Volkswagen, Shanghai-GM, and Faw-Volkswagen, the biggest three in auto market share in China.

How about the label of biggest foreign exchange holder? China's export contributes to its remarkable volume of foreign exchange. In a list of China's top 200 exporters, 153 enterprises are foreign-invested, accounting for 77.8 percent of the total exports in the top 200, according to the latest report released by China Customs, a magazine sponsored by the General Administration of Customs of China.

Surging economic growth in China has created many so-called big enterprises. However, the lack of innovation cripples the ability of the enterprises to compete with their foreign counterparts; we can rarely find any global Chinese brands.

Therefore, these gorgeous achievements could be overwhelmed by ravages caused by any possible stagnations of China's vulnerable economic growth, which now is largely relying on exports and investment. Moving forward another 20 years, it may be hard to find one No.1 tag if China still confines itself to being the world's factory.