SOE profits post milder decline

BEIJING - Combined profits of China's State-owned enterprises (SOEs) reached 1.54 trillion yuan ($230.6 billion) in the first eight months of this year, down 1.3 percent from a year earlier, official data showed Friday.

The pace of decline decelerated from a 6.5-percent slump in the first seven months, according to a statement released by the Ministry of Finance (MOF).

In the first eight months, profits of SOEs under central government control dropped 5 percent from a year earlier, while those of locally administered SOEs rose 8.4 percent, both better than the performances in the first seven months.

SOEs in the oil, petrochemical and tobacco sectors posted substantial profit declines compared with a year earlier, while transportation, real estate construction, pharmaceutical and electrical companies posted big profit increases.

SOEs in steel and non-ferrous metal industries continued to suffer losses.

SOE revenues hit 28.67 trillion yuan in the first eight months, up 0.2 percent, unchanged from the growth rate registered in the first seven months.

SOEs fared better and their profits showed signs of stabilizing although downward pressure persists, said the MOF statement.

An economic downturn, which trimmed China's economic growth to 6.7 percent in the first half of this year, has put pressure on SOEs, which are at the forefront of an official drive to reform the country's growth model and cut overcapacity.

More data suggest stabilization in the economy, with the latest Caixin General China Manufacturing Purchasing Managers' Index (PMI), a private gauge of China's manufacturing activity, showing improvement in September.

The Caixin manufacturing PMI edged up to 50.1 in September from a reading of 50 the previous month. It was only the second time the index had been in expansionary territory since February 2015. A reading above 50 indicates expansion, while anything below represents contraction.

Growth in China's August rail freight volume and a surge in industrial profits are also among the encouraging data that reinforce a message of economic stabilization.