China Sets 10% Profit Target For State Firms After Weaker-Than-Expected Q1 Results
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China’s centrally-administered state-owned enterprises (SOEs) have been given a 10 percent profit target for the rest of the year after growth figures in Q-1 fell short of an 8 percent estimate set by the State Council, reported Caixin Online on Wednesday.
Though the State-owned Assets Supervision and Administration Commission (SASAC) acknowledged the difficulties SOEs faced in the current economic climate, they urged companies to tighten their cash flow and speed up the disposal of non-performing assets.
China’s centrally-administered state-owned enterprises (SOEs) have been given a 10 percent profit target for the rest of the year after growth figures in Q-1 fell short of an 8 percent estimate set by the State Council, reported Caixin Online on Wednesday.
Though the State-owned Assets Supervision and Administration Commission (SASAC) acknowledged the difficulties SOEs faced in the current economic climate, they urged companies to tighten their cash flow and speed up the disposal of non-performing assets.
Jiang Jiemin, the newly appointed chairman of the SASAC, added that securing stable growth was at the top of the central government’s agenda this year, promising to set up a special working team to coordinate and offer assistance to companies to achieve the growth targets.
[quote]”Centrally-administered SOEs have continued a revival trend since the fourth quarter of last year,” but imbalances and risks in different industries still remain, said Jiang.[/quote]According to the China Daily, the Ministry of Finance on April 17 released data revealing that profits at China’s SOEs expanded by just 7.7 percent year-on-year in Q1. Year-on-yeah overall growth was reported at 7.3 percent, while revenues climbed by just 7.1 percent.
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Speaking to Xinhua news agency in January, Li Baomin, head of the SASAC’s research centre, said that rising costs and the unfavourable economic situation around the world was also bearing down heavily on SOEs.
In addition, a report by the Economic Observer on April 19 found that salaries at the SOEs were currently exceeding profits, at 5.1 trillion yuan ($825 billion) to 3.3 trillion yuan respectively.
The average annual income of the 3.86 million employees at the SOEs were close to 130,000 yuan ($21,043), with China Shipping Container Lines and China CAMC Engineering having the highest annual average incomes at over 400,000 yuan each.
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Huang Shu, vice chairman of SASAC, warned that central SOEs would also face challenges in uncertainty over the macro-economic recovery, industrial overcapacity and imbalances, as well as potential risks in financing activities, in the future.
The SASAC have control over 264 listed firms, including 117 large centrally-owned companies such as the China National Offshore Oil Corporation (CNOOC) and China Petrochemical Corporation (SINOPEC).
