The profit decline posted by China's st.e-owned enterprises (SOEs) widened in the first five months of this year, as the government stepped up efforts to slash excess production capacity in saturated sectors, official data showed on Friday.
Profits fell 9.6 percent year on year to 837.39 billion yuan (128.8 billion U.S. dollars) during the January-May period, according to statistics from the Ministry of Finance. The pace of decline picked up from the 8.4-percent fall registered in the first four months.
Profits of SOEs under central government control dropped 9.6 percent while those of locally-administered SOEs slumped by 9.6 percent compared with one year earlier. SOEs in the sectors of oil, chemicals and building materials posted substantial profit declines, while the coal, steel and non-ferrous metal industries continued to suffer losses.
However, transportation and pharmaceutical companies posted big profit increases. SOE revenues edged down 0.6 percent to 17.2 trillion yuan, narrowing from the 1.7-percent drop in January-April. An economic downturn, which trimmed China's GDP growth to 6.7 percent in the first quarter, has put pressure on SOEs, which are at the forefront of an official drive to reform the country's growth model and cut overcapacity.
Although downward pressure persisted, data suggests stabilization in the economy. In the first five months, industrial output grew 5.9 percent from a year earlier, up from 5.8 percent registered during the January-April period.
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