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SOEs feel profit pinch
(China Daily)
Updated: 2008-11-03 07:26

The earnings of State-owned enterprises (SOEs), excluding financial institutions, fell 2.9 percent to 1.11 trillion yuan ($162.63 billion) in the first nine months of the year, the Ministry of Finance said yesterday.

The earnings dropped despite a 25 percent rise in their sales, which was 16.03 trillion yuan, the ministry said in a report on its website (mof.gov.cn).

The profits of SOEs, controlled directly by the central government, fell 9 percent to 780.22 billion yuan during the period.

Weak demand and rising cost of raw materials squeezed the profits of the SOEs, forcing many of them to cut production as the country's GDP growth slowed to 9 percent in the third quarter, the first single-digit rise since 2002.

Poor profitability of enterprises contributed to the slowdown of China's fiscal revenue growth, the ministry said in another report on its website.

The revenue rose only 3.1 percent year-on-year to 421.7 billion yuan in September, compared to the 16.5 percent and 10.1 percent growth in July and August. And their cumulative income in the first nine months grew 25.8 percent to 4.89 trillion yuan.

China Daily - Xinhua

(China Daily 11/03/2008 page1)