China’s state owned enterprises post double-digit profit growth

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Chinese state-owned enterprises (SOEs) maintained double-digit profit growth in the first 11 months, official data showed. Combined SOE profits rose 23.5% year-on-year to 2.6 trillion yuan (around 395.6 billion U.S. dollars) for the January-November period, the Ministry of Finance said.

The growth slowed from the 24.6% increase in the first 10 months and the 24.9% rise in the first three quarters, but it was still higher than the 21.7% expansion seen in the first eight months.

SOE business revenue totalled 46.7 trillion yuan during the period, up 14.5% from a year earlier. Operating costs went up 13.7% to 45.2 trillion yuan.

By the end of November, total SOE assets stood at 151.8 trillion yuan, while their liabilities surpassed 100 trillion yuan, both up more than 10% compared with a year earlier.

SOEs in steel, non-ferrous metal, coal, oil and petrochemical enjoyed relatively large profit increases, but power generation firms suffered significant declines.

China has thousands of SOEs, but many have stagnated due to lack of competition. The government is improving their performance through a series of reforms, moving toward mixed ownership and market-oriented management.

China’s major SOEs will complete corporate governance reform by the end of 2017, according to a State Council action plan released in July. The reforms target SOEs supervised by the central government, excluding financial and cultural firms.