China state firms' profit dented by economic slowdown

State-owned enterprises (SOEs) reported profit drops for 2015 as the broader economy recorded the slowest annual expansion in a quarter of a century, data released by the Ministry of Finance showed on Monday.

The combined profits of China's SOEs fell 6.7 percent year on year to 2.3 trillion yuan (351.1 billion U.S. dollars) last year. Although the decline narrowed from a 9.5-percent drop seen in the January-November period, the ministry said downward pressure remained "relatively big."

Total business revenue for state firms decreased 5.4 percent from a year ago to 45.47 trillion yuan, while operating costs went down 4.8 percent to 44.52 trillion yuan.

SOEs in the areas of transportation, petrochemicals and machinery saw profit growth, while the steel and non-ferrous metal sectors continued to suffer losses.

By the end of last year, total assets of SOEs stood at 119.2 trillion yuan, while liabilities grew 18.5 percent year on year to 79.1 trillion yuan.

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

China has about 150,000 SOEs, and many have become ossified by declining profitability due to a lack of competition. The government is trying to improve their fortunes through reform, moving toward mixed ownership and market-oriented management in the hope that this will improve their efficiency.

Last month, a government guideline outlined plans to divide the state-owned SOEs into strictly commercial entities and those that serve governmental ends, such as power and health care, so targeted reforms can be implemented. Endit