Since the beginning of China’s economy opening up in 1978, Chinese enterprises have become increasingly important in the global economy. The share of Chinese companies on the Fortune Global 500 list has increased from two percent in 2000 to 28 percent in 2023, while the share of U.S. firms dropped from 36 to 27 percent. However, many of the biggest Chinese companies are state-owned, and the state plays an important role in the country’s economy.
Registered companies in China
At the end of 2022, around 169 million market entities were registered in China, of which 52.8 million were enterprises. The number of corporate enterprises that have their own legal entity reached 32.8 million in 2022. Most of these were small and micro-sized companies owned by private individuals, while less than three million were limited companies, publicly traded, or state-owned.
State-owned enterprises (SOE) and their extensive network of state-controlled subsidiaries numbered only around 362 thousand in 2022. However, SOEs dominate critical sectors such as finance, energy, resources, and infrastructure and constitute many of the largest Chinese companies in terms of sales volume.
Foreign companies in China
Foreign companies play an important role in China’s economy, but their former dominance has been receding in recent years. The share of foreign companies in China’s total exports decreased from almost 60 percent in 2005 to 34 percent in 2021, while Chinese brands were increasingly successful competitors in the domestic market.
By far, most foreign enterprises are registered in coastal regions of China, such as Guangdong province in the South, Shanghai, Jiangsu, and Zhejiang in the East, and Shandong and Beijing in the North of China. Hon Hai Precision, better known as Foxconn, Volkswagen, and Apple are among the largest foreign companies operating in the country.
