645 listed companies have seen their profits rise last year

In recent days, more than one thousand listed companies have issued their yearly performances in 2013, with over 60% reporting increased profits. Some experts describe this as a token amount, in terms of China's industrial makeup. According to a report by China Securities Journal, a national securities newspaper sponsored by Xinhua News Agency, 645 listed companies saw their profits rise last year. More than 60 percent of the companies are being listed on the Shanghai and Shenzhen Stock Exchanges. Among the companies, emerging industries such as electronics and media have caught the eye of investors. For example, 16 out of 17 media companies posted profits, with seven growing by more than 50 percent. Liu Baocheng, professor at the University of International Business and Economics, explains why these burgeoning companies are so successful. "They very quickly improve management standards and they attract many top talents from the rest of the world, particularly from developed countries like North America and the E.U. And they are playing beyond Chinese domestic markets, so they really gain global competitiveness." By contrast, traditional industries are presenting a less positive picture. For example, some sectors, including mechanical equipment and chemical engineering, have posted fivefold losses in the past year. "I think these industries, for the last decade, or even longer, they have been engaged in a cycle where they have a backlog of inventory. In order to keep the full operation going, and most importantly to maintain employment levels, they have to continue relying on borrowing from state-owned banks." Liu says these traditional industries are not stepping up their efforts to meet the market's demand. Liu suggests these industries not only need to adapt their management structures, but adopt dramatic institutional reforms. "As China is shifting more into domestic consumption as a driver behind Chinese GDP growth, those conventionally export-oriented companies need time to think of strategic change." Liu emphasizes that all industries, profitable or otherwise, are a representation of China's current transformative industrial landscape. Last year, for the first time in history, the serving industry overtook the goods and manufacturing industries in terms of market share. In order to invigorate domestic consumption, the service industry will have to seek out an even larger share." In 2014, Professor Liu particularly suggests that investors pay attention to some listed companies such as those in the healthcare and food supplement industries, because Chinese consumers are willing to spend more on health-related items.