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Northeast Drags SOEs Out of Debt
Efforts to bail out unprofitable State-owned enterprises (SOEs) in Northeast China have paid off in the first 10 months of this year.
The three provinces in Northeast China, Liaoning, Jilin and Heilongjiang, have all been remarkably successful in making profit and reducing losses in the January-October period.
The provinces have expressed their confidence in turning around most of their SOEs by the end of the year, the final year of the central government's three-year strategy to turn around most of its debt-ridden SOEs.
The provinces have been considered heavyweights in the nationwide SOE reform, as a large number of large and medium-sized SOEs are sited there.
According to the Liaoning Provincial Statistics Bureau, between January and October the province's 431 large and medium-sized SOEs made profits of 7.68 billion yuan (US$925.3 million), 6.13 billion yuan (US$738.5 million) more than the same period last year.
Around 30 per cent of the province's SOEs are in the red, 6.26 per cent lower on a year-on-year basis. The figure is expected to fall below 30 by the end of the year, according to Wen Shizhen, Party secretary of the province.
The province has made breakthroughs by restructuring the metallurgical, petrochemical, machinery, coal and light textile industries.
To date, of the province's 12 major industries, eight have become profitable. Nonferrous metals, coal and military enterprises which were severely in debt in the past have also taken a turn for the better. A large number of key SOEs have become economically more competitive.
In Jilin Province, 70 per cent - or 177 out of 252 - of poorly operated SOEs have hauled themselves out of difficulty by October.
Total SOE debt was reduced by more than 42 per cent - estimated at being worth 1.5 billion yuan (US$180 million).
Jilin's SOEs have made 6.74 billion yuan (US$812 million) profit, eight times more on a year-on-year basis, ranking among the best in the country.
The profits of the 50 leading SOEs in the province rocketed by 164 per cent to 6.54 billion yuan (US$787.9 million) in the first 10 months.
Jilin has invested more than 30 billion yuan (US$3.6 billion) to accelerate its business renovation, examples in the past three years being China's FAW Group and the Jilin Chemical Industry Co.
In northernmost Heilongjiang Province, industrial profit soared by 240.5 per cent to reach 50.9 billion yuan (US$6.13 billion) in the first 10 months, ranking first in the country.
The province's SOE debt decreased by 26.6 per cent.
Some of the province's 203 SOEs have restructured themselves to cater to domestic and international markets. Thirty-two SOEs working in coal, sugar refinement and light industries were closed down.
Heilongjiang's pharmaceutical, chemical fibre and petroleum processing industries have made rapid progress, contributing to 12 per cent of the total industrial growth.
The province plans to concentrate on developing its petrochemical, machinery and food industries as its pillar sectors. Electronics information, biological pharmaceuticals and new materials will be cultivated as new ways to achieve economic growth.
As China's traditional heavy industrial bases, Liaoning, Jilin and Heilongjiang played significant roles in the country's economic and industrial construction in the 1950s and 1960s.
Source: chindaily
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