By Kang Yi (康怡)
Issue 630, July 29, 2013
News, page 1
Translated by Zhu Na
Original article: [Chinese]

China's major state-owned enterprises saw profits leap over 18 percent in the first half of the year, according to information obtained exclusively by the EO.

The impressive rate of profit growth among the 100 odd centrally-administered SOEs that operate under the supervision of the State-owned Assets Supervision and Administration Commission (SASAC), is well ahead of the 10 percent profits growth target set by SASAC earlier this year.

On July 25, SASAC held the annual seminar for executives from the various SOEs in Ningxia. The conference is considered as something of a mid-year work conference by SASAC.

At the conference, SASAC revealed that collectively centrally-administered SOEs had earned total profits of 631.5 billion yuan in the first half of 2013, an increase of 18.2 percent year-on-year.

Industry insiders say that the high growth reflects the fact that profits are growing off a low base from the first half of 2012. In the first half of 2012, central SOEs actually registered negative profit growth.

"Although profits in the first half of the year were strong, these firms face many adverse factors in the second half of the year, therefore it will still be difficult to achieve the 10 percent growth target for the whole year," someone from SASAC told the EO.

One reason for the difficulty is simply that profit growth rebounded in the second half of 2012, thus increasing the growth needed to meet the 2013 target.

"Because SOEs' profit growth has been positive since last August, it will be more difficult for SOEs to continue the same level of profit growth in the second half of 2013 compared with the first half," the same SASAC official said.

In addition, many executives at the conference expressed concern regarding the economic situation in the second half of the year. Their outlook for the general economic environment is still very grim, with improvements in the macroeconomic situation unlikely.
 
At the conference, the recently appointed new chairman of SASAC Jiang Jieming (蒋洁敏) expressed that the important goals for SOEs this year are adjustment and transformation.

The conference revealed that, in addition to guiding SOEs' restructuring, it will be important to eliminate some upstream production capacity, guiding SOEs to upgrade to more advanced stages of the industrial value chain.