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Slowing profits for China’s state firms

Updated: Sep 22,2014 4:36 PM     Xinhua

China’s state-owned enterprises (SOEs) saw their profit growth slow in the first eight months of 2014 amid softening growth momentum in the broader economy, showed data released by the Ministry of Finance on Sept 22.

The combined profits of China’s SOEs rose 8 percent year-on-year to 1.64 trillion yuan ($267.4 billion) during the January-August period, slowing from the 9.2-percent rise for the first seven months.

The rise in operating costs continued to outpace revenue growth, dimming the outlook for future profit growth.

Total business revenues for the state firms increased 5.5 percent from a year ago to 31.2 trillion yuan in the first eight months, while operating costs rose at a faster pace of 5.7 percent to 30.08 trillion yuan.

By the end of August, SOEs’ total assets stood at 99.06 trillion yuan, while liabilities grew 12.3 percent year-on-year to 64.69 trillion yuan.

Between January and August, steel and transport companies reported higher profits, but coal and chemical industries saw notable drops in profits.

The figures, which exclude financial firms, were collected from SOEs in 36 provincial-level regions and those administered by the central government.

China has thousands of SOEs, 113 of which are directly administered by the country’s central authorities.