State- owned giants’ net profits up 2.1%
▶ Centrally administered SOEs remain backbone force of China’s economy
Against the backdrop of the coronavirus pandemic, the global economic downturn and a sustained US crackdown, China’s centrally administered state- owned enterprises’ ( SOEs) net profits were up 2.1 percent to 1.4 trillion yuan ($ 215.89 billion) in 2020, with officials and experts giving recognition to their vital roles in China’s fight against the virus and as a mainstay in China’s economic growth.
Nearly 80 percent of the centrally administered state- owned giants reported year- on- year profit growth, Peng Huagang, spokesperson of the Stateowned Assets Supervision and Administration Commission of the State Council ( SASAC), told reporters on Tuesday.
However, the total operating revenue of centrally administered SOEs last year was down 2.2 percent to 30.3 trillion yuan, Peng noted, but those in the automobile, mining, construction, telecoms and steel sectors reported revenue growth.
Tian Yun, vice director of the Beijing Economic Operation Association, said the combination of surging net profits and declining revenue reflected the adverse impacts of the ChinaUS trade war and the coronavirus pandemic.
“Internal structural adjustment at centrally administered SOEs is another reason. For instance, competition in sectors that allow private enterprises to enter has become more intense,” Tian told the Global Times on Tuesday.
The number of overseas projects for the centrally administered SOEs has also declined in recent years, as some have shifted to key countries and regions with a changed focus, he noted, while the overseas expansion of Chinese private enterprises intensified the competition.
In addition, the reform of several SEOs in the energy sector has pushed up the prices of commodities, keeping the profits of the SOEs high, despite slightly decreasing total revenue, according to Feng Liguo, a research fellow at China Minsheng Bank’s research center.
According to the SASAC, production and sales of oil, gas, power, steel and coal at centrally administered SOEs saw steady growth year- on- year across 2020. The cumulative production of crude oil was up 0.6 percent year- on- year, while coal output grew 4.4 percent and commercial coal sales were up 6.8 percent.