A Dividend from SOEs

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It was previously reported that key SOEs might have to pay dividends to the central government. Having seen profits rise by 30% in 2007, it is now confirmed that SOEs are getting the call. Xinhua reports:

    “China’s centrally administered state-owned enterprises (SOEs) are expected to see annual profits leap some 30 percent in 2007 buoyed by a strong economy, according to statistics released Tuesday.

    Aggregate profits of 152 SOEs under the supervision of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) would probably hit 980 billion yuan (132.4 billion U.S. dollars) for the whole year, SASAC said.

    In the January-November period, SOEs recorded gross profits totaling 918.66 billion yuan, up 31.7 percent from the same period last year. Net profits surged 33 percent to 552.21 billion yuan.

    The enterprises combined return on net assets was 11.7 percent for the first 11 months, representing an increase of 1.3 percentage points from a year earlier. Total assets climbed 21 percent to 14.6 trillion yuan.

    Aggregate sales revenue rose 20.5 percent year-on-year to 8.72 trillion yuan.

    Some 21 SOEs, including the recently-listed China Railway Engineering Corporation, recorded sales revenue of more than 100 billion yuan for the January-November period. This was compared to14 enterprises a year earlier, the SASAC said.

    “The centrally administered SOEs are gaining in their ability to increase profits,” Minister Li Rongrong of the SASAC said.

    Statistics showed that 139 enterprises, or more than 90 percent, increased profits year-on-year in the 11-month period. Eighteen recorded profits of more than 10 billion yuan, against 14 a year earlier.

    Shipbuilding, automotive and shipping enterprises were becoming new, significant profit earners, joining those in petroleum, power generation and telecom sectors. “

The reform of SOEs seem s to be entering a new phase. But how far will real commercial reforms go? Still, it is a long way from the mess of the 1990s. And it will be interesting to see if and how the money flows to central coffers.

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