BEIJING: China’s state-owned enterprises reported a drop in profit for 2015 as the broader economy recorded the slowest annual expansion in a quarter of a century, data released by the Ministry of Finance showed yesterday.
The combined profit of SOEs fell 6.7 percent year on year to 2.3 trillion yuan (US$350 billion) last year. Although the decline narrowed from a 9.5 percent drop seen in the January-November period, the ministry said downward pressure remained “relatively big.”
Total business revenue for the SOEs fell 5.4 percent from a year ago to 45.47 trillion yuan, while operating costs shed 4.8 percent to 44.52 trillion yuan.
Profits grew for SOEs in the transport, petrochemicals and machinery sectors while the steel and nonferrous metal sectors suffered losses.
At the end of last year, total assets of SOEs were 119.2 trillion yuan, while liabilities grew 18.5 percent year on year to 79.1 trillion yuan.
The figures, which exclude financial firms, were collected from SOEs in 36 provincial-level regions and those administered by the central government.
China has about 150,000 SOEs, and many have become ossified by declining profitability due to a lack of competition. The government is trying to improve their fortunes through reform, moving toward mixed ownership and market-oriented management in the hope that this will improve their efficiency.
Last month, a government guideline outlined plans to divide the SOEs into strictly commercial entities and those that serve government ends, such as power and health care, so that targeted reforms can be implemented.
