BEIJING: China’s State-owned enterprises are suffering from continued headwinds amid a slowing economy, as government reforms to consolidate the sector have yet to bear fruits in the short run.
About 21 percent of the country’s listed SOEs, their subsidiaries included, saw profit losses in the first three quarters, with the worst 10 losing about 13.5 billion yuan ($2.1 billion), the Beijing Youth Daily reported on Thursday.
Those in industries such as steel, coal, shipping and non-ferrous smelting are worst-hit. Among the deficit wrenched, 30 percent are steel and non-ferrous smelting companies and 20 percent are coal firms, said the newspaper.
Sinopec Oilfield Service Corp, a wholly-owned subsidiary of Sinopec Group, led the plunge with 2.06 billion yuan losses in the last three quarters, followed by the Chinese steel firm SGIS Songshan Co Ltd with 1.78 billion yuan.
The Chinese government has been stepping up efforts in recent years to overhaul the State sector by rolling out a slew of measures, including encouraging private investment and mixed ownership, in a bid to scrap off overcapacity and piling stock.
The sector has been bogged by overcapacity, inefficient cost control, and slow industrial upgrading, which are hindering the current transition of economic growth pattern in a big scale.
The sector’s profits plunged 21.5 percent year on year in February to about 256 billion yuan, in what was the biggest year-on-year fall since 2009, according to an earlier report.
