Finance security index hits 10-year-low

The financial security index of Chinese non-financial listed companies in 2015 reached its lowest level in 10 years, the Ministry of Commerce said in a report.

Chinese non-financial listed companies' FSI would be 5,227.35 in 2015, a 2 percent year-on-year decrease, the report said. The FSI has continuously declined for four years since 2012.

"The figure showed China's macro-economy continued to decline, and the real economy's operational and financial difficulties have not been resolved. The Chinese government should pay attention to the increasing financial risks of listed companies," said Pu Xiaolei, deputy director of the Credit Management Department under the Chinese Academy of International Trade and Economic Cooperation, the Ministry of Commerce's think tank.

The report said the overall financial security condition of Chinese-listed companies was normal and no systematic financial risks would occur, but some individual sectors such as real estate had shown some risks.

The investment and financing risks in China were also comparatively high, and doing such businesses should be prudent, it said.

According to the report, the financial security index of Chinese-listed companies on the main board was much lower than that at the small and medium enterprise board or ChiNext market, China's Nasdaq-style market.

"The small and medium enterprise board will be of high investment value, followed by the ChiNext market, and the main board would be of least investment value and rising risks," said Pu.

The financial security condition of China's secondary industry in 2015 was the best and that of tertiary industry was the worst. The financial security indexes of primary, secondary and tertiary industries are all declining compared with last year.

The home appliance sector performed the best on the financial security index among 25 sectors of the three industries, and the real estate sector performed the worst. Jiangxi province ranked the first by the financial security index in China this year, and it has been in top five for five years.

The FSI of Tianjin in 2015 decreased 20.7 percent year-on-year, which showed the financial security condition of listed companies in the area was deteriorating.

The report said that of the 2,256 Chinese non-financial listed companies, only five had the highest financial security ranking this year. It also said 823 Chinese non-financial listed companies were suspected of whitewashing their financial statements to varying degrees, an increase of 79 over last year.