China Media Group:

In terms of the main data, the performance of central SOEs in the first half of this year has been very good. What are the main reasons for this? What are the new characteristics of central SOEs in the first half of the year? Thank you.

Peng Huagang:

Thank you for your questions. In the first half of this year, as I have just mentioned, central SOEs have made steady progress in their economic operations, significantly improved their economic performance, showed sustained resilience in their development, and maintained a development trend of steady and fast improvement. All business indicators are eye-catching, which is the biggest feature of the first half of this year.

First, revenue and profit increased rapidly. In the first half of the year, the operating revenue of central SOEs reached 17.1 trillion yuan, up 28.2% year on year, while the two-year average growth rate was 8.7%. More than 90% of enterprises maintained double-digit growth, and the total realized profit was 1.31 trillion yuan, up 116.7% year on year, and the two-year average growth rate was 17.9%. At the beginning, I also reported that the net profit was 1,023.21 billion yuan, exceeding 1 trillion yuan for the first time in half a year. We used to say that "half of task is completed halfway through the year." In fact, from the perspective of the law of economic operation, the task is a little less completed, because more efforts will be made in the second half of the year. This time, we absolutely completed half of our task as we marked the halfway point, and for the first time, exceeding 1 trillion yuan, with an average growth of 20.6% for two years. The net profits of most industries witnessed substantial increase.

Second, operation quality continued improving. In the first half of the year, the operating revenue profit margin of central SOEs was 7.6%, up 3.1 percentage points compared to the same period of the previous year, and 1.1 percentage points higher than that of the same period in 2019. The annual labor productivity was 685,000 yuan per worker, up 30.5% year on year. In the first half of the year, the operating cash flow of central SOEs exceeded 1 trillion yuan, which was the best ever level during this period, an increase of 139.6% year-on-year. At the same time as a substantial growth in performance, various enterprises have persisted in tightening their belts, focusing on management and controlling costs, and the financial expenses have decreased by 6.4% year on year. At the end of June, the overall debt-to-asset ratio of central SOEs was 64.9%, a year-on-year decrease of 1 percentage point. 

Third, driving force for development became stronger. In the first half of the year, central SOEs invested 321 billion yuan in R&D, an increase of 37.4% over the same period last year, and the intensity of R&D investment increased by 0.12 percentage point over the same period last year. Among them, the R&D investment intensity of central industrial enterprises increased by 0.14 percentage point year on year. In the first half of the year, the fixed asset investment of central SOEs increased steadily, with a total investment of 1.1 trillion yuan, a year-on-year increase of 10.5%, and an average growth rate of 8.7% in two years. The growth of scientific research investment and investment has made our development more powerful.

It should be said that the economic operation of central SOEs has made steady progress, and improved steadily and rapidly, providing strong support for the "six stabilities" and "six guarantees."

We owe these achievements to the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core and to the scientific guidance of General Secretary Xi Jinping's important remarks on the reform and development of state-owned enterprises and Party building. At the historic juncture of the "Two Centenary Goals," General Secretary Xi Jinping, with a strong sense of historical responsibility, made plans for China's economic work in the first year (of the 14th Five-Year Plan period), pushed China's economic recovery and epidemic prevention and control measures to remain at the forefront of the world, provided fundamental impetus for the business and development of central SOEs, and strengthened their confidence and determination.

In the first half of the year, central SOEs also benefited from China's further advantages in epidemic control and economic growth as well as a sound external environment. Another reason for the good performance is that the State-owned Assets Supervision and Administration Commission of the State Council (SASAC) and central SOEs have resolutely implemented the decisions and arrangements of the CPC Central Committee and the State Council, made thorough plans, taken proactive actions, and worked hard to overcome difficulties and achieve new progress. Central SOEs planned and acted proactively and implemented the requirements for them to achieve the goals that the growth rates of net profit and total profit are higher than that of the national economy, the profit margin of operating income, the intensity of R&D investment, and the productivity of all employees improve notably, and the asset-liability ratio is steady, healthy and controllable. They have actively risen to all kinds of risks and challenges, and seized opportunities to expand markets, increase income, bring out potential and improve performance. All staff members have been hard-working and dedicated, making new achievements in reform, development and Party building. It is fair to say that we have delivered very good performance in the first half year. Thank you.