Hit by the economic slowdown, profits of China’s mighty state-owned enterprises (SOEs) nosedived 14.2 per cent to $34.2 billion in the first two months of this year, according to official data released here today.
SOEs saw combined profits decelerated 14.2 per cent year-on-year in the January-February period to 222.6 billion yuan ($34.2 billion), a much sharper drop than the 6.7 per cent fall recorded for 2015, data from the Ministry of Finance showed.
The state sector continued to face great downward pressure, the ministry said in a statement.
SOEs administered by local governments were the worst hit, with their profits plunging 40.9 per cent from a year earlier.
Centrally-administered SOEs saw profits slip 8.2 per cent year-on-year.
Total business revenue of Chinese SOEs dipped 5.8 per cent year-on-year to 6.2 trillion yuan in the first two months, the ministry said.
As of the end of February, combined debts of the state firms swelled 17.9 per cent to 79.7 trillion yuan, while their total assets expanded 15.6 per cent to 120.3 trillion yuan.
State firms in medical and machinery sectors posted relatively high profit growth, while oil, coal, steel and non-ferrous metals continued to suffer losses, state-run Xinhua news agency reported.
The figures, which exclude financial firms, were collected from SOEs in 36 provincial-level regions and those administered by the central government.
China has about 150,000 SOEs, and some have become ossified by declining profitability due to lack of competition and an industrial glut.
The government is trying to improve their fortunes through reform, moving towards mixed ownership and market-oriented management on the hope that this will improve their efficiency.
The Chinese economy, the world’s second-largest, last year slowed down to 6.9 per cent, the lowest in 26 years.