According to Fortune, China Petroleum & Chemical Corp defended its title as the largest company in China with 2.79 trillion yuan in revenue in 2012, followed by PetroChina Co, which reported 2.2 trillion yuan in revenue last year.

The two energy giants came fourth and fifth on Fortune's table for the world's top 500 companies this year, each up one notch.

China State Construction Engineering Corp overtook China Mobile Ltd as the third-largest company in China, while ICBC came fifth on the table.

The threshold for China's top 500 was lifted from 6.2 billion yuan in 2012 to 7.3 billion yuan this year. In all, 48 new corporate names, including the People's Insurance Co (Group) of China Ltd, Goertek Inc and Yuanda China Holdings, made their debut on the table.

Sportswear maker Li Ning Co fell out of the table due to a 24.5 percent decline in revenue last year.

Solar industry players such as Suntech Power Holdings Co and LDK Solar Co, which have been experiencing domestic overcapacity and foreign trade protectionism, were also missing from this year's table.

"The government must review its industrial development plan to prevent similar situations with companies in the future," Luo said.

Wang Zhile, a senior researcher on foreign investment at the Chinese Academy of International Trade and Economic Cooperation, under the Ministry of Commerce, said although Chinese companies are growing bigger, they are far from being strong.

The average number of employees at Chinese companies on the Fortune Global 500 list was 1.6 times the level of their foreign counterparts and their overseas revenue shares were generally lower.

"These facts demonstrate clearly that the performance of Chinese companies needs to improve," Wang said.