Chinese state firms Jan.-Oct. profits up 45% to 1.6 trillion yuan

21:51, November 19, 2010      

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The Ministry of Finance published today the operation results of state-owned enterprises (SOEs) for the first ten months of the year. Robust growth was recorded in profits, revenues and taxes.

SOEs (excluding state-owned financial institutions) made 1.63 trillion yuan of profits this year by October, marking a remarkable growth of 44.8 percent year on year. Their business revenue went up by 34 percent to 24.5 trillion yuan. The tax payable reached 2 trillion yuan, 27 percent higher than the same period of last year.

However, they earned less business revenue than in September, with a slight decrease of 3.7 percent. Their costs soared by 33 percent to 23 trillion yuan compared with the first 10 months of last year.

The profit-to-sales ratio stood at 6.6 percent in this period, the ratio of profit to cost at 7.1 percent, and the profit rate of net assets at 8.6 percent. All are higher than the same period of last year, by 0.5 percentage points, 0.6 percentage points, and 1.7 percentage points, respectively.

Inventories held by SOEs grew by 21.3 percent from January to October and the inventory in October was 2.7 percent higher than in September.

Sectors of chemicals, nonferrous metals, transportation, iron and steel and power generation boasted higher year-on-year growth than other sectors. Growth of profit is reported in October from September in electronics, chemical, textile, petroleum and construction materials while slowdowns were seen in tobacco, property construction, power, coal and transportation.

The number of SOEs under central government control had dropped from 196 in 2003 to 128 by the end of 2009 when the State-owned Assets Supervision and Administration Commission of the State Council was established as the controlling shareholder and regulator of SOEs.

The number of central SOEs is expected to be further cut to between 80 and 100. About 83 percent of the assets of central SOEs are invested in petroleum and petrochemical, power, defense, telecommunication and transportation, mineral, and machinery.

The number of SOEs was slashed by 20 percent to 143,000 between 2004 and 2008, while the number of private companies rose by 81 percent to 3.6 million. The share of SOEs' assets in terms of China's total corporate assets went down by 8 percentage points, while private company assets were up by 3.3 percentage points.

By Li Jia, People's Daily Online


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