BEIJING: Most of China's biggest companies are enjoying rapid revenue growth but are still lacking in areas like innovation and building brands, according to new research.

The Chinese Enterprise Confederation and China Enterprise Directors Association ranked the country's 500 largest firms by sales, collectively generating 3.6tr yuan in 2010, up 31.6% year on year.

Sinopec, the petroleum company, led the charts with revenues of more than 1.9tr yuan, followed by CNPC, from the same segment, on 1.7tr yuan, and the State Grid, the energy provider, on 1.5tr yuan.

ICBC, the bank, posted 545bn yuan, beating China Mobile, the telco, with 519bn yuan, while the China Railway Group, China Railway Contstruction, China Life Insurance and the Agricultural Bank of China all bettered 400bn.

One key trend was that state-owned players contributed 316 of the top 500, and the entire top ten were active in sectors dominated by the state, such as finance and natural resource extraction.

"The lack of China's major enterprises in competitive industries has exposed their low competitiveness," said Miao Rong, vice director of the Research Department of the China Enterprises Confederation.

Although the 500 featured organisations had filed 220,000 patents in the last year, on average they spent just 1.4% of operating revenues on R&D, a figure surpassing 3% in less than a fifth of cases.

"The growth in the operating revenues of China's top 500 enterprises is mostly not driven by technological progress," said Miao.

"It is a tough job, in the short-term, to make Chinese corporations catch up with their foreign counterparts in terms of 'soft power', such as the capability of resource integration, management expertise, brand building and intellectual property protection."

In all, 279 manufacturing companies made the list, headed by Sinopec, followed by three automakers: Dongfeng on 368bn yuan, SAIC on 367bn yuan and FAW on 294bn yuan.

The manufacturer rankings were dominated by these industries, with Huawei one of the leading technology specialists on 185bn yuan, Haier the appliances group on 141bn, and Bright Food on 104bn yuan.

Some 143 service providers joined players like the State Grid and ICBC in the top 500, including consumer-facing firms such as China Telecom, the mobile network, on 260bn yuan, and Ping An Insurance, on 196bn.

Suning, the electronics retailer, registered 156bn yuan, closely followed by rival chain Gome on 155bn, the study revealed.

Data sourced from People's Daily, Xinhua,, Forbes; additional content by Warc staff