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China

Profits at China’s State-Owned Firms Tumbled Last Quarter

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Reuters
Reuters
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By
Reuters
Reuters
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April 26, 2016, 5:45 AM ET
CZECH-CHINA-DIPLOMACY
Photograph by Michal Cizek — AFP/Getty Images

Profits at China’s state-owned firms fell 13.8% in the first quarter from a year earlier, though the rate of decline eased slightly from the first two months of the year, the Ministry of Finance said on Tuesday.

Total profits at state firms were 432.3 billion yuan ($66.56 billion) in the first quarter, while revenues fell 3% to 9.95 trillion yuan.

Pharmaceutical and petrochemical companies saw relatively large profit increases, while profits at building materials, electronics and tobacco companies fell from a year earlier, the ministry said.

Coal, steel and nonferrous metals companies suffered losses.

The data does not include earnings from state-owned financial firms.

Profits at centrally-administered companies fell 13.2% in the first three months from a year earlier, while the earnings decline at local state firms narrowed significantly to 15.8% in the first quarter from a 40.9% plunge in the first two months of the year.

Growth in assets at state firms in the first quarter was unchanged from the January to February period at 15.6%, while liabilities increased at a rate of 18.1%, faster than the 17.9% increase in the first two months of the year.

China is in the midst of a push to restructure the state-owned sector of its economy, but progress has been slow and the firms continue to dominate many key industries.

China’s economy grew at its slowest pace in seven years in the first quarter. However, indicators from the consumer, investment and factory sectors point to nascent signs the slowdown in the world’s second-largest economy may be bottoming out.

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