Web Exclusive

SASAC denies overseas losses report

By Hu Yang (chinadaily.com.cn)
Updated: 2010-12-09 17:10
Large Medium Small

Overseas investments have generated large profits for China's central enterprises, an official from the country's state-assets watchdog said, responding to a media report that overseas State-owned assets are suffering huge losses, the National Business Daily (NBD) reported Thursday.

The official of the State-owned Assets Supervision and Administration Commission (SASAC) said, on the whole, central enterprises have strong profitability and have generated a lot of profits, and they are trying to avoid risks for some individual projects.

A previous report said central enterprises face great risks in managing overseas assets, and the losses exposed were only a small part of the whole picture.

Related readings:
SASAC denies overseas losses report China to tighten supervision on overseas assets
SASAC denies overseas losses report Chinese companies boost investment in overseas assets
SASAC denies overseas losses report 'Wrong' to hit at outbound investment
SASAC denies overseas losses report Companies' overseas investments up 10.4% in 1st 9 months

The SASAC official said profits from overseas investment accounted for around 50 percent of the total profits of central enterprises in 2008，and the figure was 37.7 percent in 2009. And the SASAC has always been encouraging central enterprise to join international competition, he added.

Risks in overseas investment are mainly in real economy and futures contracts with international investment banks, and it is necessary to differentiate investment categories in order to carry out effective supervision, according to the official.

He also said real economy investment has staged strong profitability.

The SASAC revealed last December that 96 central enterprises invested in derivative contracts with a market value of $125 billion yuan ($18.8 billion), and recorded floating net losses of 11.4 billion yuan, but later the investments turned into profits due to surging crude oil prices.

According to the NBD report, former SASAC vice chairman Li Wei said the regulator will strengthen supervision over futures contract.