China Railway Construction Corporation (CRCC), the country's second-largest State-owned construction firm, admitted Wednesday that its 2012 entertainment bill was relatively high.

CRCC said it would try to lower its entertainment budget by at least 10 percent this year.

According to the company's annual report released in March, more than 830 million yuan ($135 million), or 10 percent of the company's net profit, was spent on entertainment. This included spending on catering, accommodation, gifts and travel arrangements for clients related to daily business operations.

This figure only accounted for 0.17 percent of the company's revenue in 2012, and that did not violate any rules, according to a response from CRCC to the Xinhua News Agency Wednesday.

The admission has ignited a heated discussion among Web users, with many questioning how the State-owned enterprise (SOE), which benefits from favorable State policies and subsidies, could be so extravagant.

"This relatively high [entertainment] expenditure has drawn the company's attention several years ago and controlling the entertainment cost has become critical to evaluate the company's governance," an anonymous CRCC executive told the Beijing News Wednesday. 

The executive said the 830 million yuan is made up of costs from over 11,000 subsidiaries in over 60 countries. He added that the company will carefully implement the frugal work style called for by President Xi Jinping.

Two other SOEs, China Communications Construction Company and Sinohydro Group also spent over 100 million yuan on entertainment in 2012, China National Radio reported Sunday, although CRCC spent the most.

Global Times