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July 26, 2016

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Reforms slow drop in SOEs’ profits

DEEPENING market reform slowed the decline in combined profits of China’s non-financial state-owned enterprises in June.

Their profits fell 8.5 percent year on year to 1.13 trillion yuan (US$169 billion) in the January-June period, data from the Ministry of Finance showed yesterday.

The pace of decline slowed from a 9.6 percent drop in the first five months.

Profits of SOEs under central government control slumped 9 percent while those of locally administered SOEs shed 7 percent from a year earlier.

Last month, SOEs in the coal sector became profitable for the first time this year, while steel and nonferrous metal SOEs continued to suffer losses, the ministry said.

Pharmaceutical and construction SOEs recorded substantial profit growth, while profits for oil, chemical and petrochemical SOEs declined.

SOE revenues fell 0.1 percent to 21.4 trillion yuan, narrowing from the 0.6 percent drop in the January-May period.

President Xi Jinping earlier this month urged continued efforts to propel reforms of SOEs to enhance their competitiveness as China plans to merge centrally administered SOEs to bring their total number to 100 this year.

The State-owned Assets Supervision and Administration Commission, the country’s SOE regulator, has said market-oriented SOE reforms helped lift their profits in the second quarter.


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