Chinese Chemical Companies Have Lower Revenues to Employee Ratios than US Chemical Companies

The revenues (sales) to employee ratios for 32 Chinese chemical companies were determined from revenues and employee numbers found on the chemical company websites.  The average ratio for these companies is $366,815 per employee (converting 2,384,298 CNY per employee using the exchange rate 6.5 CNY = 1 USD).

For 20 US companies, Securities and Exchange Commission (SEC) filings were used to find sales to employee ratios.  The resulting average ratio for all 20 companies is $544,556 per employee.   Assuming the Chinese company revenues and employee numbers found are reasonably accurate, US companies are much more effective in generating revenues per employee ($544,556 versus $366,815).  The US companies had an average employee number of 7,641 and the Chinese companies, 10,377.

Economists often indicate that the quality of a country’s labor force is the primary factor determining that country’s ability to grow its economy.  The revenues to employee ratio is an indicator of such quality, with the larger revenues to employee amount indicating a higher labor force quality.

The Chinese companies chosen to include in the analysis were based on an extensive searching of the Internet.  All Chinese and US companies used in the analysis have between one billion and fifteen billion of dollars in revenues.  The companies chosen primarily provide chemical products.  The revenues to employee ratios were determined by totaling the revenues for the 32 Chinese and 20 US companies. Then, these totals were divided by the total number of employee for the 32 and 20 companies.

Chinese chemical company websites seem to be the primary, perhaps in most cases the only, source of data about the companies.  So a problem about data on Chinese company websites is being unable to easily find independent sources, such as SEC filings, to verify the data.   The websites do not seem to be updated on a timely basis. 

However, website standards for Chinese companies do seem to include that at least sales and employee data be presented.  It is possible that the sales and employee data on the websites are reasonably accurate (as of the date of the data) since such data is likely monitored by other Chinese companies and the state, and incorrect data might be quickly noticed, and be a source of embarrassment for the company.

If you are interested in how I might help you with further research and analysis related to Chinese chemical companies, please email me.