China’s central SOEs post remarkable growth in H1

World
Europe

01:27

China's centrally-administered state firms posted a blistering performance in June, pushing first half revenue and profit growth to best ever levels.

Their total revenues hit two trillion US dollars, up 10.1 percent year-on-year. Combined profit rose 23 percent to 132.1 billion US dollars. Both numbers were up markedly from first quarter levels.

Industries such as Petrochemicals, metallurgy, power generation contributed the most to the growth, exceeding 30 percent.

Cost control is one of the factors behind the record first half performance for China's central SOEs.

Cost per RMB100 of revenue dropped 0.6 yuan. The number for petrochemicals, steel, power generation and mining is more than 1 yuan.

Going into the second half, central SOEs must brace for the impact of tariffs as part of the China-US trade frictions. Many SOEs are in sectors that are hit by the tariffs, such as automobile and agriculture.

But analysts say the feed through effect will be limited and the government is consulting with businesses to offer safeguard measures.

"All enterprises want a clear and defined rule of trade, without any unilateral manipulation, and a stable and fair environment of trade, rather than uncertainties,” according to Peng Huagang, deputy secretary general of China’s State-Owned Assets Supervision and Administration Commission.

“On the one hand, we will prepare for any risks. On the other hand, we are determined to expand opening-up and cooperation," Peng said.