China's central SOEs cut 2,730 subsidiary legal entities

BEIJING - China's centrally administered state-owned enterprises (SOEs) cut 2,730 subsidiary legal entities last year, said a senior official on Thursday.

The central SOEs posted a narrower yearly loss and reduced management costs in 2016, said Xiao Yaqing, head of the State-Owned Assets Supervision and Administration Commission of the State Council.

The companies reduced loss and management costs by 4.39 billion yuan ($639 million) and 4.91 billion yuan respectively, according to Xiao.

Major problems with the bloated centrally administered SOEs include weakness in core business, too many sideline businesses, low efficiency and excessive layers of administration and management.

The excessive layers of hierarchy and redundance persisting in the centrally administered SOEs are also part of the reason the reform has not been easy to push through over the years.

Mixed-ownership reform is expected to help make breakthroughs in the reform and authorities will take substantial steps in reform in the electricity, oil, natural gas, railway, civil aviation,telecommunications and military industries, said Xiao.

China has 102 central SOEs, which manage the bulk of the country's state assets.

The companies saw their combined profits and revenues both return to growth in 2016. Total profits climbed 0.5 percent year on year to 1.23 trillion yuan, while revenues rose 2.6 percent to 23.4 trillion yuan, official data showed.