Profitability, innovation and internationalization—these are some of the focuses of the country’s top companies. Seventy years after the founding of the People’s Republic of China in 1949, China’s corporate scene has transformed, with market forces playing a dominant role. State-owned enterprises are no longer the sole players though they continue to make prominent contributions to the economy.

Among China’s top 500 companies, 265 are state-owned and 235 are private, according to the 2019 list released by the China Enterprise Confederation (CEC) and the China Enterprise Directors Association on September 1. The companies come from 76 industries. While 244 are from manufacturing, 173 are from the service sector.

Irrespective of their ownership structure and business, they are exploring new frontiers and moving up the value-added ladder. Their combined net profit in 2019 was 4.49 trillion yuan ($633.29 billion), up 20.7 percent year on year. The profit margin on net assets stood at 9.7 percent.

Their sales revenues totaled 79.1 trillion yuan ($11.16 trillion), while their total assets amounted to 299.15 trillion yuan ($42.19 trillion). Their combined revenue and assets reached 87.1 percent and 89.5 percent of the U.S. top 500 companies’ revenues and assets respectively, and 116 enterprises from the Chinese mainland entered the list of the global top 500.

The deleveraging effort of Chinese enterprises has been effective. The top 500 have a liabilities-to-assets ratio of 83.8 percent, a decline of 0.6 percentage point from a year ago.

During the past year China issued a number of tax incentive policies to encourage research and innovation. Stimulated by these policies, the large enterprises have intensified investment in research and development (R&D). Of the top 500, 426 provided figures for their investment in R&D, which is over 976 billion yuan ($137.52 billion), up 21.7 percent year on year. Their average input stands at 2.29 billion yuan ($322.99 million), a year-on-year increase of 9.1 percent. The telecom equipment manufacturing industry tops in average R&D investment.

In addition, 340 of them participated in the formulation of more than 1,900 international standards, representing 350 more than a year ago, with telecom enterprises reporting the best performance.

The number of patents held by China’s top 500 is also increasing. This year, 396 of them held 1.11 million patents.

“Represented by the top 500, large Chinese enterprises continued sound and steady growth, and the tendency of shifting to

high-quality development is becoming increasingly clear,” CEC Chairman Wang Zhongyu said. “However, they are still falling behind in global supply chain leadership, innovation in key technologies and indigenous intellectual property rights.”

Wang said large Chinese enterprises should follow an innovation-driven development strategy and improve their ability to run international businesses.

Zhu Hongren, CEC Executive Vice Chairman, said over the years, Chinese companies have developed sound ties with their peers around the world. Through healthy competition, they can accomplish win-win outcomes.

The Belt and Road Initiative has opened up a major path to internationalization for Chinese companies, Zhu said, adding that they should increase their presence overseas to make the most of their potential.