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Last Updated: Monday, 4 September 2006, 07:47 GMT 08:47 UK
Profits soar at China's top firms
Man filling up car at petrol station in Beijing
Sinopec has benefited from high oil prices
China's 500 largest companies saw combined profits rise by more than a fifth to 642.8bn yuan ($80.4bn; 42.1bn) last year, research has found.

Profits rose 23%, according to the China Enterprise Confederation, while combined sales totalled $1.8 trillion.

China's red-hot economic growth has been driven by growth in the energy, chemicals, steel and banking sectors.

According to the survey, oil firm Sinopec is China's most profitable, with returns of $2.8bn in 2005.

Banking profits

This represented a 108% increase on Sinopec's earnings compared with the previous year, as profits were boosted by oil prices that surged to record highs.

China's four other most profitable firms were electricity supplier State Power Grid, China National Petroleum Corporation, the Industrial and Commercial Bank of China (ICBC) and China Mobile.

State Power Grid
China National Petroleum
Industrial Bank of China
China Mobile

Energy firms have benefited from dominant positions in the marketplace while reforms to laws governing foreign investment in finance firms have boosted bank returns.

Of the 500 companies included in the list, 349 are state owned.

The contribution of China's leading companies to overall economic output has continued to grow.

The sales of the top 500 accounted for 78% of China's total gross domestic product (GDP) last year, up from 74% in 2004 and 56% in 2001.

Despite the overall growth in returns, the survey revealed that many Chinese firms are struggling to boost profitability.

The top 85 companies accounted for 85% of overall profits.

The Chinese economy continues to grow rapidly, expanding nearly 11% in the first quarter of the year.

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