Various polls are saying fund managers will increase their bets on mainland enterprises. After all, Beijing is pouring 4 trillion yuan (HK$4.54 trillion) into the economy. Before embracing their view, here are some facts you should know.
On August 10, the top state-asset manager, Li Rongrong, happily told a conference room packed with local and foreign press people: 'We have found the way of running good state-owned enterprises in a market economy with socialist characteristics.'
He went on to detail the stellar score cards of centrally owned state enterprises in the past five years, since the establishment of the State-owned Assets Supervision and Administration Commission. Among them are the 1.3 trillion yuan average turnover and 150 billion yuan profit growth annually.
On November 11, Mr Li urged SOEs to tighten their belts and cash-flow controls, as their profits had dropped 14.3 per cent and one-third of them have seen a sharp rise in account receivables in the first nine months of the year.
On Monday, State Airport Group, which is owed 800 million yuan in landing fees by airlines, confirmed it will get a 1 billion yuan injection from the state.
Yesterday, Aluminum Corporation of China (Chinalco) said it would lay off more than 5,500 temporary workers and cut its capital expenditure. China Petroleum is reportedly planning to axe 5 per cent of its staff within three years.