China State-Owned Enterprises Lost 92.8 Billion Yuan

December 4, 2005 12:00 am Last Updated: December 4, 2005 12:00 am

According to information from the National Bureau of Statistics of China, on November 22, the total loss of state-owned enterprises and state-owned holding companies reached 92.8 billion yuan (US$11.51 billion) in the past 10 months. The highest deficit increase occurred in October.

Researchers believe that the main reason for this trend is that demand cannot keep pace with the excessive supply caused by over investment, especially in the steel industry.

In fact, because of the decrease in profits, researchers who brought up the deflation theory early this year are worried that the price increase is too mild. The year end is approaching but the decrease of profit is still continuing. In general, businesses that are already doing well continue to do so, but the smaller and struggling businesses have really been hit hard.

The building materials industry is a perfect example of overall profit decrease. The depression of cement and flat glass manufacturing enterprises has caused the profit of the whole building material industry to decrease by 10.9 percent during the last 10 months; the depression of the automobile manufacturing industry resulted in a 28.9 percent profit decrease in the whole transportation equipment manufacturing industry; the profit of chemical fiber manufacturing enterprises decreased by 30.9 percent; the profits of the telecommunication industry decreased by 3.3 percent and the oil processing and refining industry experienced a total loss of 18.8 billion yuan (US$23.33 billion).