The Best of Chinese Commentators

Alarm bells over SOE profit growth

  • Published 30 Apr 2009

Profits among China's large state companies are reported to have bounced back in March. Is this information reliable, and if so, is it good or bad?

Combined profits of China's large State-owned Enterprises reached Rmb 62.29bn ($9.13bn, €6.9bn, £6.18bn) in March, up 26% from a year earlier and 85.7% from February, according to official figures. Economists and academics expressed concern that the trend – if it is real – shows an imbalance of fiscal support between SOEs and the country's small and medium-sized enterprises. The news adds to concerns that SMEs, which make up 60% of China's gross domestic product according to the China Association of SMEs, will struggle to cope in the wake of the economic downturn.

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