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SOEs' profit posts slower fall

CHINA'S state-owned enterprises reported a slower annual decline in profit last month, after the government's massive stimulus policies began to bear fruits.

Their net profit fell 27 percent from a year earlier to 553.4 billion yuan (US$81 billion) in the January-June period, the Ministry of Finance said on its Website yesterday.

In the first five months, the earnings dropped 30.3 percent from a year earlier, implying a smaller decline last month. The SOEs have seen a smaller profit decline for four months.

Their profit rose 29.4 percent last month from a month earlier, the ministry said without revealing detailed figures.

"The performance of SOEs in June improved a lot, which kept pace with the trend of the macro-economy," said Liu Tiejun, an analyst at Haitong Securities Co. "We expect the profits of SOEs will keep recovering like that of fixed-asset investments and industrial added value."

The SOEs generated 9.79 trillion yuan in revenue in the first six months, a drop of 5.9 percent from the same period last year.

The profit of SOEs administrated by the central government lost 20.9 percent on a yearly basis to 416.4 billion yuan in the six months, the ministry said.

Earnings in petrochemicals, building materials and construction continued to grow in the first half, while those in the tobacco and coal industries were stable. The electronics industry returned to profit and losses in the steel and shipping industries narrowed, the ministry said.

The slower decline in SOEs' profit echoed the recovering macro-economic figures in the first half. China reported a better-than-expected economic growth of 7.9 percent for the second quarter this year, which boosted the first-half growth to 7.1 percent from a year earlier, making the country a step nearer to hitting its target of an 8-percent growth this year.

"We estimate GDP to grow 8.7 percent in the third quarter and 9.9 percent in the fourth quarter, which would lead to an 8.2-percent growth for the whole year," Ha Jiming, a senior economist at China International Capital Corp, said yesterday.


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