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Central SOEs set to help steady economic growth

By ZHANG YUE | China Daily | Updated: 2022-02-23 10:01
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Employees of China National Petroleum Corp inspect an oil extraction plant in Gansu province in December. [Photo/Xinhua]

Stable revenue backs high-quality development despite pressures

The steady growth in revenue of centrally administered State-owned enterprises will better help underpin overall economic growth this year, while these enterprises are also expected to do more in terms of research, innovation and keeping prices stable, experts said.

The State-owned Assets Supervision and Administration Commission of the State Council said on Feb 15 that in January, major economic indicators of China's centrally administered SOEs achieved steady double-digit growth as they have worked actively to keep growth stable and pursue high-quality development.

In January, revenue of centrally administered SOEs reached 3 trillion yuan ($470 billion), up 12.4 percent year-on-year. Total profit of these enterprises stood at 185.27 billion yuan, climbing 11.3 percent compared with last January. Total net profit grew 10.2 percent year-on-year to 142.38 billion yuan. Tax and fee payments by these enterprises came in at 352.16 billion yuan, 18.2 percent higher than a year earlier.

Fu Baozong, a professor at the Academy of Macroeconomic Research under the National Development and Reform Commission, said that notable revenue growth by centrally administered SOEs will better help them play an important role in bolstering economic growth this year. Fu said that since last year, a set of measures has been rolled out to help SOEs in improving efficacy and bringing down debt ratios, with visible effects seen. Yet the development of SOEs is also faced with a complex and challenging situation at home and abroad, as are most businesses this year.

"The Central Economic Work Conference in December said the economy is faced with the threefold pressures of contracting demand, supply slump and weakening expectations. This is also the complex situation facing SOEs. This year, SOEs will play a greater role in keeping production and supply chains stable and shoring up weak links in the economy. Their revenue growth needs to be better leveraged to catalyze development of private and smaller businesses in mid to downstream industries, while they should also make contributions in keeping overall prices stable," he said.

SASAC said that in January, the output of raw coal, sales of refined oil products and the production and sales of steel products of central enterprises have all maintained steady growth. Trade volume has also delivered rapid growth.

Fu said the threefold pressure points to fiercer competition in the market as demand is contracting. Therefore, SOEs must work relentlessly to seek key technological innovations to upgrade the country's production and supply chains.

"It is important to take a holistic view when looking at SOEs' growth as they are a very important part of China's economy, and the degree of revenue growth is only part of the overall perspective," Fu said. "This year, SOEs, while maintaining steady growth, need to work more proactively in seeking research breakthroughs and technological innovation to help the country achieve high-quality growth."

A meeting of heads of centrally administered SOEs late last year clearly urged these enterprises to notably increase their investment intensity of R&D funds.

Jiao Huaiqing, an official with China State Shipbuilding Corp, said that in January, its number of signed contracts for ships increased by 146.5 percent year-on-year, with the bulk coming from developed countries.

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