Top Biz News

Rule may see SOEs add to public coffers

By Hu Yuanyuan (China Daily)
Updated: 2006-09-20 09:08

Improved management and innovative technology have seen the country's 165 key central SOEs realize 351.65 billion yuan (US$43.96 billion) in first-half profits, up 16 per cent on a yearly basis. And their sales revenue also climbed 20.6 per cent compared with the same period last year.

The SOEs' performance has raised public concern that part of their revenue should be given to the government to supplement public fiscal needs.

"Chinese SOEs so far have not paid any dividends because they have had their own difficulties in the past, meaning we had to let them keep the profit for their own development," said Li. "But now their situation is much better."

China currently has over 120,000 SOEs with the SASAC overseeing 165 of the key businesses. Their revenue after tax, or net profits, is used for their development.

According to a World Bank report it is common for SOEs to give their dividends to the finance ministry for public payment in OECD (Organization for Economic Co-operation and Development) countries.

If China's SOEs could offer 50 per cent of their profits to the government, which accounted for 6.5 per cent of the country's gross domestic product in 2004, public funding for education and healthcare would rise by 85 per cent, said the report.