China Daily Weekly - 02.08.2019

ByLIUXINGGUO

F

or the first time in the

29-year historyof the

FortuneGlobal 5 00 list,

Chinese companies (129)

outnumber those from the United

States (121). This is also the first

time that a countryother than the

US has more companies on the

list.

Among the 129Chinese enter-

prises on the list, 119 are domestic

in naturewhose average revenue

increased 9.2 percentyear-on-

year — higher than the average

revenuegrowth ofFortuneGlobal

500 companies.

These enterprises’ rates of profit

and net asset profitwere 5.3 per-

cent and 9.9 percent,up 0 .2 per-

centage points and 1 percentage

pointyear-on-year.

TheChinese enterprises have

also taken firm steps toward

high-qualitydevelopment.And

although theyhaveencountered

some difficulties due to the Sino-

US trade frictions and the tech-

nological containment measures

taken bythe US government and

some US enterprises, their growth

has continuedunabated.

Three major factors are behind

theChinese enterprises’ con-

tinuous and rapid development:

reform, demand and innovation.

China’s supply-side structural

reform has improved the mar-

ket competition environment,

promoted qualitativesupply,

increased the enterprises’ earning

power, and enhanced their devel-

opment potential and momentum.

Increasing global demand for

Chinese products due to their

cost advantage and rapidlygrow-

ing domestic demand driven by

income growth form the basis of

their expanding scales.Bu thet

greatest factor drivingChinese

enterprises’ continuousdevelop-

ment is innovation.

Reformwill promote innova-

tion. Innovationwill generate

newdemand and promptChinese

enterprises to improve their qual-

ity,while technological innovation

is keyto their development and

expansion.

And to change their long-term

dependence on low-end products,

theChinese companies,with the

government’s active help, have

invested more in research and

development to facilitate their

qualitative growth and expansion.

Lastyear,China’s total invest-

ment in R&Daccounted for 2.18

percent ofGDP, equ ivalentto the

average of OECDcountries,with

the average R&Dintensityof high-

tech enterprises andA-share listed

companies being about3percent

and 4.87 percent.

Higher R&Dinvestment has

increased the enterprises’ capacity

for independent innovation and

competition advantage.

In particular, since the 18th

NationalCongress of theCom-

munist PartyofChina in Novem-

ber 2 0 12,which formulated the

innovation-driven development

strategyand fivenewdevelop-

ment concepts,Chinese enterpris-

es have increased R&Dinvestment

and achieved remarkable break-

throughs in core technologies. In

fields as important as aviation,

railwa and 5ys Gtechnology,Chi-

nese enterprises haveeven taken a

leading position.

Huawei is a good example of an

innovation-driven high-techChi-

nese company.Foryears, Huawei’s

R&Dintensityhas been above14

percent. In actual terms, Huawei’s

R&Dinvestment lastyearwas

10 1.5 billionyuan ($14.77 billion)

— the fifth-highest in theworld

and more than that of Microsoft,

Apple and Intel.Also, bythe end

of lastyear, Huawei had more

than 87,8 00 global patents. No

wonder Huawei’s R&Dinvestment

and abundant innov ationhave

placed Huawei at 61 on the 2 019

FortuneGlobal 5 00 list.

And despite Washington pre-

venting US companies from sell-

ing components to Huawei in the

first half of thisyear, the compa-

ny’s mobile phone shipments grew

continuously.

Since the beginning of this

century,Chinese companies have

been applyingortrying to apply

modern information technology

to improve production and opera-

tions. The Internet Plus strategy

has helped expedite the integra-

tion of enterprises and the inter-

net.And manyenterprises have

achieved rapid growth bymaking

use of innovativebusiness models,

thankstoIT.

When it comes to fast-develop-

ingChinese companies, Xiaomi is

anapt example, because after just

eightyears of establishment it has

made it to theFortuneGlobal 5 00

list, becoming theyoungest com-

panyto do so.

Xiaomi’s “hardware plus inter-

net” business model has helped it

to avoid direct competitionwith

other mobile phone companies

and achieve high-speed growth

through internet marketing. Later,

it changed its business model to

“hardware plusnewretail plus

internet”,which organicallyinte-

grated retailswith the internet

to further propel the company’s

growth.

Yetweshould be aware of the

gap betweenChinese enterprises

and theirEuropean andAmerican

counterparts.

For example, the net asset

income rate ofChinesecompanies

is remarkablylower than that of

European andAmerican enter-

prises —which means there is

much room for improvement in

China’s industrial structure.

So,Chinese enterprises should

accelerate the development of

strategic emerging industries and

the modern service industry, and

achieveupgrading through reform

and innovation, in order to climb

up the global industrial andvalue

chains.

Theauthorisaresearcheratthe

ChineseEnterpriseConfederation.

Theviewsdonotnecessarily

representthoseofChinaDaily.

MaindriverofChineseenterprises’continuousdevelopmentisinnovation

BySYEDADHANAKFATIMA

HASHMI

I

nternational efforts for peace

inAfghanistan are being

rewarded.

InDoha, the capital of

Qatar,unprecedented meetings

co-hosted byGerman and Qatari

officials in Julybrought together

diverse factions ofAfghanistan and

envoys from the United States.

Sixteen Taliban individuals, albeit

present in their own capacity,and

6 0Afghans — delegates from politi-

cal parties, government officials

and representatives of civil society

organizations — engaged in discus-

sions that led to a potentiallyposi-

tive arrangement.

The meetings have raised hopes

for peace.Both sides agreed to

reducingviolence bywithholding

attacks on religious and education-

al centers, hospitals, commercial

markets and dams.

Since the IslamicEmirate of

Afghanistan of the 199 0 swas felled

byforces led bythe US for shelter-

ingal-Qaida terrorists, the Taliban

has repeatedlyrefused to negotiate

with the West-backed government.

Its shift in strategyis conducive for

peace, though it remains to be seen

howa cease-fire can be achieved

thatwill pave thewayfor lasting

peace in the country.

The Taliban, eager to build a

positive image, is reported to be

willing to agree to some sort of

cease-fire, as it has expressed guilt

for killing civilianswho are fellow

Afghans. However, it also claimed

it might not have an alternative

strategy.

The role of Pakistan andChina

cannot be ignored in this regard.

Pakistan has played a keyrole in

aiding theAfghan peace process

and the US-Taliban talks. These

have reportedlymade promising

progress over the past fewmonths.

On the other hand,China has

been considered important by

nations that havepursuedefforts to

engage theAfghan government and

the Taliban in peace talks.

First,China joined others to

initiate support for the Taliban-US

peace talks, an intra-Afghan dia-

logueandthefightagainstterror-

ism inAfghanistan.

Next,Chinaworkedwith Paki-

stan for their stated goal of bring-

ing theAfghan conflict to an end

through peace talks involving all

major stakeholders, including the

US, theAfghan government and the

Taliban.

As members of a quadrilat-

eral coordination group that also

includedAfghanistan and the US,

Pakistan andChina have backed

everyAfghan peace initiative,

including talks inDoha and intra-

Afghan meetings in Moscow.

The peace talks gained huge suc-

cess forAfghanwomen andyoung

people.

Women’s rights and freedom

are among issues at the top of the

agenda in talks. Judging from the

long historyofAfghanwomen as

victims of ignorance and extrem-

ism, itwas a momentousdevelop-

ment as the Taliban leadership met

with the female representatives,

including one of their leading crit-

ics,Fawzia Koofi, a former member

of the lower house of theAfghan

Parliament.

The inclusion ofAfghanwomen

in the peace talks indicated a

remarkable shift in the Taliban’s

perspectivetowardwomen, though

the Taliban insisted thatwomen’s

rights be protectedwithin an Islam-

ic framework.

Following the downfall of the

Taliban’s regime,Afghanwomen

have participated in social, political

and cultural activities and played a

highlysignificantrole.

Schools anduniversities employ

more than 68, 000 female instruc-

tors, including 800 university

professors in private and public

institutions. More than 6,000 wom-

en serveasjudges, prosecutors,

defense attorneys, and police and

armypersonnel.

Afghanistan government data

counts about1 0 ,000 women among

the country’s doctors, nurses and

health professionals, and some

1,15 0 entrepreneurs.

However, the Talibanwill not

easilyabandon its goal of establish-

ing an IslamicEmirate, despite

continued diplomatic efforts. In the

event of a cease-fire, it mayfunc-

tion as a political partythat might

hold major offices in theAfghan

government.

Yet, through the talks, the Tali-

ban andAfghan representatives

aim to present a satisfactoryexam-

ple of awayinwhich theycould

express their thoughts patiently

and in a friendlymanner.But the

path toward sustainable peace

can be laid onlywhen a cease-fire

is agreed to and adhered to byall

parties.

Theauthorisasocialscientist,

researchscholarandpublic

policyanalyst.Theviewsdonot

necessarilyreflectthoseofChina

Daily.

Intra-Afghantalksraisehopes,butitremainstobeseenifalastingsolutioncanbeachieved

Cease-firecrucialforpeaceinAfghanistan

R&DbigfactorinFortune5 00 success

24 COMMENT August 2-8, 2019 CHINA DAILY GLOBAL WEEKLY