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Central SOEs post smaller profit decline

CHINA'S state-owned enterprises administered by the central government posted a smaller decline in profit as a stimulus package gave a boost to their financial performance.

The 138 central SOEs reaped a profit of 238.91 billion yuan (US$35.13 billion) in the first five months, down 31.5 percent year on year, said the State-owned Assets Supervision and Administration Commission at the weekend.

But the decline was 4.5 percentage points lower than the January-April figure.

The SOEs recorded a profit for May at 58.08 billion yuan, 6.7 percent less than a month ago.

The SOEs saw a 9-percent drop in revenue to 4.19 trillion yuan in the first five months from a year ago, but it was 0.2 percentage point lower than in the first four months.

Their revenue in May totaled 951.7 billion yuan, up 6.3 percent from a month ago.

The Ministry of Finance last week said the total profit at the SOEs tumbled 30.3 percent to 425.4 billion yuan in the first five months of this year from a year earlier, after dropping 32.3 percent in the first four months.

The ministry's survey didn't include financial companies. Profit fell 7.5 percent last month on a month-on-month basis.

"The major indicators are still in a downward cycle despite showing a slowing pattern," the ministry said.

Earnings in the tobacco, construction materials and petrochemical sectors improved in the five-month period, the ministry said.

Profit in the petroleum, machinery, automobile, electronic and chemical sectors continued to fall but the pace of decline slowed.

Although the power industry was still in the red, it narrowed its loss.

The steel, nonferrous metals and ocean shipping industries suffered a heavier loss, the ministry said.

China's economy is now at a critical stage, Premier Wen Jiabao has said as he reiterated the need for continued efforts to stimulate a recovery.

Economists at CITIC Securities said in a recent report that the overall industrial profits in China will likely stop falling and rebound within the year.


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