Profits at SOEs fall 11.6pc this year as costs rise

PUBLISHED : Tuesday, 17 July, 2012, 12:00am
UPDATED : Tuesday, 17 July, 2012, 12:00am
 

State-owned companies' profits fell to 1.02 trillion yuan in the first six months of the year, 11.6 per cent less than in the same period last year, due to higher input costs, the Ministry of Finance said.

For the first four months of this year, combined profit was only 8.6 per cent lower than in the same period last year.

The ministry attributed the fall to input costs rising more quickly than revenue.

But a statement on its website did not indentify how many state firms there were this year or in the past.

State firms in the tobacco, automobile and telecommunications sectors recorded strong profit growth, while those in transportation, chemicals, non-ferrous metals and building materials suffered a big drop, the ministry said, without given percentage changes for individual sectors.

Beijing last week said gross domestic product grew 7.6 per cent from a year ago in the April-June quarter, weaker than the 7.7 per cent economists expected, and a marked slowdown from the 8.1 per cent growth in the first quarter.

Consumer price inflation dropped to 2.2 per cent in June from 3 per cent in May.

At the weekend, Premier Wen Jiabao conceded that the economy had yet to see a sustained rebound and warned it may face a prolonged period of hardship.

His warning came two days after the world's second largest economy posted the weakest quarterly growth in three years.

But he said the recent trend of easing consumer price inflation provided more room for macro-economic policy adjustments to stimulate the slowing economy.

'Currently, economic growth is still within the range we expected early this year, and policies to support growth has borne fruit as growth is slowing, but stabilising,' he said after a visit to Chengdu, Sichuan province, at the weekend.

China's central bank last week cut interest rates for the second time in less than a month. It hopes it will jumpstart a slowing economy.

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