China's state-owned and state-controlled enterprises reported a decline in profit for a third consecutive month in October, the Ministry of Finance said today.
SOE profit dropped 8.3 percent to 1.23 trillion yuan (US$180 billion) in the first 10 months after slipping 2.9 percent during the first three quarters.
Income increased 23.4 percent to 18.07 trillion yuan through October. The growth slowed from 25 percent in the period through September.
The ministry did not disclose the figures for October alone, but said it was the third straight month SOEs reported falling net income and that the extent of the drop had expanded.
"The performance of SOEs reflects the realities of China's slowing economy. It demonstrates a narrower profit margin when external demand falls sharply and domestic consumption needs a boost," said Li Maoyu, an analyst with Changjiang Securities Co.
The outlook was also grim with the ministry saying growth in production costs moderated 1.7 percentage points through October compared with the first three quarters.
"It could be that companies have found more ways to save money, but it could also come from less production plans for the future," Li added.
Also, investment gains by SOEs fell 11.1 percent from a year earlier in the first 10 months, the first drop so far this year.
China's economic growth eased to 9.9 percent in the first three quarters, down from 11.9 percent last year.
The World Bank predicted China's growth would further slow to 7.5 percent next year amid the global economic slowdown.
(Shanghai Daily November 26, 2008)
