ProfitabilityofChineselistedcompanies1Profitabilitystudy:Significanceandkeyconclusions1.1SignificanceofprofitabilitystudyProfitsarethecoreofbusinessoperationsinamodemeconomy.Driveforprofitskeepproducersproducingandretailersselling.Ascompaniesexpand,capacityexpansionstartstogrowbeyonditsownmeans.Fundraisingbecomesanecessity.Thiscanbeachievedthroughloans,bondsorstocks.Thekeyforbankloansorbondissuanceiscreditworthiness,orborrowers'abilitytopaybackdebt.Forthestockmarket,thefocusisonpresentandfutureprofitability,intermsofearnings,earningsgrowth,cashflows,marginsandmarketshares.Inthedirectcapitalmarket,capitalinvestmentdestinationsaredeterminedthroughcomparingreturnonequity(ROE).Companiesthatcandeliverearningsandcreatemaximumreturnoninvestmentdeservethetoppicks.Unliketheoriginalcapitalistorentrepreneur,moneyatthestockmarketlevelhasmanychoicesofinvestment.Itismuchlessattachedtotheoriginalinvestmentplanandtypicallylesspickyaboutwhichindustryormanagement(smartinvestorsdocareaboutsectorandmanagement,butmainlyfromaninvestmentperspective,notfromapersonalone)itwillinvestin.Moneyiscommittedtomakemoney.Thehigherandthestrongerprofitsare,thebiggerthereturnstheinvestmentwillreap.WhileROEprofitabilityisatthecentreofequitymarketsworldwide,lessemphasistoithasbeengiveninChina.TheshortlifespanofChina，sstockexchange,excessivedomesticliquidityinthepastyearsandrestrictionsoncapitalflowallappeartohavedirectedattentionawayfromprofitability.ManagementofsomelistedChinesecompaniesmayalsonottobefocusingonthisissue.Inoverseasmarkets,Chinesecompanies'lackofprofitabilityisprobablythemostfrequentlycitedconcernamongstequityinvestors.Lessanxietyisexpressedin4thedomesticA-sharesmarkets,butarisingawarenessofearningsandotherfundamentalshasbeenevidentrecently.AsChineseequitymarketsdevelopandmature,webelievethatdomesticinvestorswillplaceastrongeremphasisonprofitabilityanddemandhigherreturnsonequity.Theprofitabilityissuegoesbeyondcapitalmarketsandinvestors，interests.Itisalsoacentralpillarofacountry"ssustainablegrowthpath,becauseprofitsrepresentwealthaccumulation.Improvementinprofitabilityisaproxyofproductivitygains.OnekeylessontobelearntfromtheAsianFinancialCrisisinthelate1990sisthateconomicgrowthmustbeassociatedwithimprovementinproductivityandprofitability.TheoldAsianmodelofpursuinghighgrowththroughcontinuedcapitalandlabourinputsdeliveredimpressiveresultsforyearsorevendecades,butultimatelyfailed.Thereisanabundantamountofeconomicsliteraturedetailingthe“AsianmodeF9anditsflaws,soweshallnotextendthediscussionfurtherinthispaper.Nonetheless,itisclearthatshiftingawayfrom“quantitativeexpansion^oramarketsharedriv---本文来源于网络，仅供参考，勿照抄，如有侵权请联系删除---endevelopmentpatternto“qualitativeexpansion12345'oraproductivitydrivendevelopmentpatterniscrucialforChina"slongtermdevelopmentstrategy.Thisisaboutthesustainabilityofon-goingrapideconomicdevelopment.Thisisaboutthelong-termprospectsofChina.ResearcharticlesfocusingontheprofitabilityandcorporategovernanceofChineselistedcompaniesfromamacroperspectivefromChinaorinternationalfinancialinstitutionshavebeenfewandfarbetweenuntilrecentyears.Moreover,wetookourstudyalittlefurtherbycomparingprofitabilityonaglobalscaleaswellasonanindustrybasis.Toourknowledge,thishasneverbeendonebefore,butissignificantinordertounderstandthestrengthandweaknessof...