China’s centrally-managed state-owned enterprises (SOEs) are expected to see profit growth this year despite the sluggish world economy cutting into their profitability.
At a meeting on Monday, Wang Yong, head of the State Assets Supervision and Administration Commission (SASAC), said SOEs reported net profits of 1.1 trillion yuan (174.88 billion U.S. dollars) in the first 11 months of this year, nearly unchanged from the same period last year.
Meanwhile, SOEs raked in 20.1 trillion yuan in sales revenue, marking year-on-year growth of 8.9 percent, according to figures provided by the SASAC.
SOEs’ total assets had reached 31.2 trillion yuan by November this year, up 11.5 percent year on year, according to the SASAC.
SOEs experienced profit drops in the first two quarters of this year, driven by an overall decline in world economic growth. This posed great challenges to the business operations of SOEs, said Wang.
Despite this harsh situation, Wang said SOEs managed to reverse profit declines in the third quarter thanks to a series of measures taken to shore up profitability. The measures included further freeing up SOEs from performing social functions in a bid to make them more market-oriented, eliminating non-core businesses and encouraging innovation.
The SOE regulator helped 21 SOEs resolve problems concerning social functions in 2011, according to SASAC officials. They added that social service functions have presented difficulties to policy makers working to transform SOEs into market-oriented firms.
Historically, an SOE in China functioned as a social unit providing employees with life-long employment as well as offering all necessary social services to workers and their families, including housing, healthcare, child care, education and groceries. X Furthermore, Wang said the SASAC is making efforts to adjust the structure of the SOEs, in a bid to optimize overall efficiency.
So far, nearly 80 percent of state-owned capital has been distributed across seven major fields — the military, petroleum and petrochemical, power, telecommunications, coal, civil aviation and shipping industries.
Wang also vowed that SOEs will further increase investment in research and development, while emphasizing training talents and promoting technical innovation in order to solidify the basis for long-term development.