Public unhappy with SOEs' huge profits

• Source: Global Times
• [02:15 September 03 2010]
• Comments

The public hasn't benefited much from the SOEs' success. The central SOEs turned over under 40 billion yuan in dividends to the central government in 2009, less than 6.2 percent of their 600 billion yuan after-tax profits.

Instead, frequent reports of major SOEs pushing record high prices in land auctions showed that their profits have been largely devoted to investment in property.

Guo Jianguang, a professor at the Central University of Finance and Economics said that under the country's Constitution, the public were the real shareholders of the SOEs, which gave them the right to a share of the profits.

Apart from the profit issue, corruption in SOEs has also left the public less than satisfied. Thirty-five senior executives of large SOEs faced corruption charges last year.

The lack of supervision over executives was singled out as the major reason for this problem. Unlike managers in private companies, most senior managers in SOEs have official titles, while many are nominated by the Organization Department of the CPC Central Committee.

SASAC has responded by trying to reform the way it hires personnel. It has recruited 113 senior officials since 2003 and have 20 more posts of higher level open this year.