Chinese state firms' profits slump further

China's state-owned enterprises (SOEs) saw profit declines accelerate in the first two months of 2015 as they are hit by a slowing economy, official data showed Friday.

SOEs saw combined profits slump 14.2 percent year on year in the Jan.-Feb. period to 222.6 billion yuan (34.2 billion U.S. dollars), according to data from the Ministry of Finance, a much sharper drop than the 6.7-percent fall recorded for 2015.

The state sector continued to face great downward pressure, the ministry said in a statement.

SOEs administered by local governments were the worst hit, with their profits plunging 40.9 percent from a year earlier.

Total business revenue of Chinese SOEs dipped 5.8 percent year on year to 6.2 trillion yuan in the first two months, the ministry said.

State firms in medical and machinery sectors posted relatively high profit growth, while oil, coal, steel and non-ferrous metals continued to suffer losses.

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 some have become ossified by declining profitability due to a lack of competition and an industrial glut. 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. Endi