China’s central SOEs see steady, rapid revenue growth

By Liu Zhiqiang from People’s Daily

 

China’s central state firms continued to see steady growth in the first nine months of the year, official data showed.

 

Aggregate revenues of the country’s centrally-administered state-owned enterprises (SOEs) increased 11 percent year-on-year to 21.1 trillion yuan ($3.05 trillion) in the January-September period, according to the State-owned Assets Supervision and Administration Commission (SASAC).

 

The revenue growth remained above 10 percent in four months in a row, SASAC deputy secretary general Peng Huagang said at a press conference of the State Council Information Office on Monday.

 

Peng said the central SOEs also saw better profitability as their combined profits expanded 21.5 percent in the first nine months, posting revenue increases of more than 20 percent in five consecutive months.

 

The central SOEs handed more taxes and fees to the State, contributing over 1.7 trillion yuan in the first nine months, a year-on-year increase of 7.3 percent and the growth rate was 2.1 percentage points higher than that of the same period in the last year.

 

Meanwhile, a further drop of 66 percent in the debt-asset ratio was reported by the end of September, down by 0.5 percentage points from a year ago.

 

In the first three quarters, the central SOEs’ fixed-asset investment recorded 1.5 trillion yuan, a 2.7 percent rise year on year. Most of the investment went to areas such as major livelihood projects, green development, and science and technology.

 

The SOEs production efficacy was improved. In the first nine months, the revenue generated per person rose by 12.5 year on year, the profit created per head went up 23.1 percent year on year and the overall labor productivity increased by 8.4 percent year on year.

 

Peng said the solid steps toward high-quality development of the SOEs had further infused confidence and resolution into the SASAC to cope with risks and better moved forward with reform and development of these companies.

 

Reform of state-owned enterprises was proved to be effective in recent years. So far, corporate reform has covered about 94 percent of China’s SOEs and the proportion of mixed-ownership enterprises under central SOEs rose to 68.9 percent in 2016.

 

Strategic restructuring was also solidly accelerated. Since the 18th National Congress of the Communist Party of China (CPC), restructuring of 38 SOEs was completed in 20 groups. The number of legal entities of SOEs was reduced by more than 10,000. In addition, 21.7 billion yuan of labor cost, and 18.8 billion yuan of management fees, were saved.

 

The target of the country’s SOEs reform and reshuffling was to turn these companies into independent entities that were absolutely self-managed, self-disciplined and able to assume full responsibility for their own profits and losses, Peng said.

 

Through the reform, the SOEs would share the same status with other types of companies in the use of production factors, in the market competition and in the protection of the law, he added.

 

In response to questions on the principle of competitive neutrality, Peng said that the government would remain neutral toward companies of all categories of ownership, and stood against the practice of setting up different sets of international rules based on a company’s ownership type or  simply discriminating against State-owned companies.

 

Some media had claimed that SOEs are expanding through merging or acquiring private firms. Peng said it was imperative to know that on one hand, the state-owned companies were important and their roles were crucial, and on the other hand, the central government always encouraged and supported private companies to develop.

 

Besides, reform of mixed-ownership companies was a two-way road and a win-win strategy, Peng pointed out. Through encouraging private companies to take part in the reform of state-owned enterprises and supporting state-owned capital to invest in private companies, the mixed-ownership reform, based on equality and mutual benefit and the principle of making use of each other’s complementary advantages, would bring win-win results.

 

So far, 2/3 of the central SOEs’ subsidiary corporations were in mixed ownership. During the wide reforms of SOEs, 11,651 legal entities were shed and 2,618 of these entities were transferred to private ownership, said Peng.