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Chinese SOE profits drop 0.1% to $201.5b in Jan-June

BEIJING: The profits of China’s State-owned enterprises (SOEs) continued to fall in the first half of the year, but at a slower pace as the economy appears to be stabilizing with the filtering through of pro-growth measures, official data showed here the other day.

SOEs’ combined profits dipped 0.1 percent from a year earlier to 1.2 trillion yuan ($201.5 billion) in the January-June period, the Ministry of Finance said in a statement on its website. The rate of decline narrowed from a drop of 3.3 percent for the January-May period.

According to the ministry, SOEs’ profits have been down all this year but performance has been steadily improving since the January-February period, when they declined 21.5 percent from one year earlier.

It said the business revenue of SOEs was down 5.8 percent year on year while their operating costs fell 5.3 percent during the period.

SOEs in transport, chemicals, electronics and power generation sectors saw strong increases in profits while the coal mining, steel, petroleum and petrochemical industries posted notable profit drops. The non-ferrous metal industry reported a loss of 4.5 billion yuan in the first half, according to the statement.

China’s economy posted a better-than-expected growth of 7 percent in the second quarter of 2015. The growth, unchanged from the first quarter, remained in line with the government’s target for full-year growth.

To boost slowing economic growth, the country has cut benchmark interest rates three times this year while lowering banks’ reserve requirement ratio. It also accelerated fiscal spending on infrastructure to shore up investment.

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