China's central SOEs continue rapid revenue growth

China's central state firms continued to see strong revenue growth in the first three quarters of the year, official data showed Monday.

Aggregate revenues of the country's nearly 100 centrally-administered state-owned enterprises (SOEs) increased 11 percent year-on-year to 21.1 trillion yuan (3.05 trillion U.S. dollars) in the January-September period, the State-owned Assets Supervision and Administration Commission (SASAC) said.

The revenue growth picked up from 10.1 percent in the first half of the year. "There has been a continued steady trend," SASAC spokesperson Peng Huagang said at a press conference.

In September, 19 central SOEs posted revenue increases of more than 20 percent from a year ago.

Peng said the central SOEs also saw better profitability as their combined profits expanded 21.5 percent in the first nine months. Industrial companies, with profits surging 33.7 percent, contributed more than 80 percent of the total profit growth of central SOEs.

A series of other financial indicators of central-SOEs were also released, showing a further drop in the debt-asset ratio, vigorous fixed-asset investment and an upsurge in cash flow.

Peng attributed the improving performance to the country's supply-side structural reform, which has created a better macro environment for the real economy, and reforms in promoting mixed-ownership and modern corporate governance.

China's emphasis on risk prevention, including debt control and financial business restructuring, also helped the stable development of SOEs, according to Peng.

SOEs in China used to be considered as overstaffed and less-competitive, but a string of reforms in recent years have invigorated torpid state firms, making them more market-oriented.

Consolidation is underway. The number of central SOEs has dropped to 96 from 116 in 2012. Private investors have been encouraged to hold bigger stakes. The proportion of mixed-ownership enterprises under central SOEs rose from 65.7 percent in 2013 to 68.9 percent in 2016, and more than 420 billion yuan of non-public capital has been introduced into the central SOEs since 2017.

SOEs also briskly reduced excess capacity and cut off loss-making, debt-ridden "zombie companies," Peng said.

"After 40 years of reform and opening up, SOEs have been integrated into the market economy," Peng said. "China's goal is to turn state firms into truly independent market entities that are equal with other types of companies in the use of production factors, in market competition and in being protected by the law."