SOEs’ profit decline slows as economy stabilizes

The decline in State- owned enterprises’ ( SOEs) profits has been slowing as the economy stabilizes, official data showed Monday.

Profits fell 8.5 percent yearon year to 1.13 trillion yuan ($ 169 billion) in the first six months of 2016, narrowing from a 9.6 percent slump in the January- May period, according to statistics released by the Ministry of Finance ( MOF).

In the first half, profits of SOEs under central government control dropped 9 percent from a year earlier, while those of locally administered SOEs slipped 7.1 percent, both lower than the decreases in the first five months, the MOF said.

SOEs in the coal industry reported profits for the first time this year, but the steel and nonferrous metal industries continued to lose money.

SOEs in the oil and chemical sectors posted substantial profit declines compared with a year earlier, while pharmaceutical and real estate construction companies posted big profit increases.

SOEs’ revenues edged down 0.1 percent to 21.4 trillion yuan, narrowing from the 0.6 percent drop in the January- May period.

An economic downturn is exerting pressure on the SOEs, which are at the forefront of an official drive to reform the country’s growth model and cut overcapacity.

Although downward pressure persists, data suggest stabilization in the economy.

China’s GDP grew 6.7 percent year- on- year in the second quarter, slightly faster than expected and stable from the first quarter.