Central SOEs off to positive start in 2019

By Wang Yi Source:Global Times Published: 2019/4/16 21:43:41

wind power plant built by China Power Investment Corp in Jiujiang, Jiangxi Province. According to the National Bureau of Statistics Thursday, during the first nine months of this year, large industrial enterprises with annual revenues of over 20 million yuan ($3.14 million) generated profits totaling 3.68 trillion yuan, up 27 percent year-on-year.

China's centrally administrated state-owned enterprises (SOEs) reported favorable financial results and an investment surge in key sectors such as 5G in the first quarter of 2019. 

Their aggregate operating revenue grew 6.3 percent year-on-year to 6.8 trillion yuan ($1 trillion), Peng Huagang, a spokesperson for the State-owned Assets Supervision and Administration Commission (SASAC), said at a press briefing of the State Council, China's cabinet, on Tuesday.

Profit growth was even better, reaching 426.5 billion yuan, up 13.1 percent year-on-year, while the debt-to-asset ratio declined further, falling 0.2 percentage points during the first quarter, Peng said.

Officials said the good growth momentum of central SOEs came as the nation's policies such as mixed-ownership reform yielded results. 

So far, 70 percent of all central SOEs and their subsidiaries have introduced mixed-ownership reform. 

The number of SOEs, including centrally administrated SOEs, that started this reform in 2018 has reached 2,880, Peng said.

"Mixed-ownership reform can integrate SOEs' abundant capital strength and credit advantages with the market's management advantage," Tian Yun, vice president of the Beijing Economic Operation Association, told the Global Times on Tuesday.

"More powerful enterprises like Huawei are expected to emerge under the new capital transmission mechanism that will accompany further promotion of mixed-ownership reform," Tian added.

Central SOEs' investment in 5G research and development was up 39.5 percent year-on-year in the first quarter, the SASAC's data showed.

The data indicates the investment structure is improving at a faster pace, Tian told the Global Times on Tuesday.

Central SOEs have continued to contribute to the economy amid overall downward pressure, Ju Jinwen, a research fellow at the Institute of Economics of the Chinese Academy of Social Sciences told the Global Times on Tuesday. 

The SOEs' good profitability performance along with a falling debt ratio and improving efficiency was in line with the stabilization of the world's second-largest economy's growth, as indicated by earlier data such as the Purchasing Managers' Index, Ju said. 


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