Profit at Chinese state industry rises with virus recovery

BEIJING (AP) — Profit at state-owned companies that dominate China’s banking, oil and most other industries rose by as much as 25 per cent last year as the country recovered from the coronavirus pandemic, the government said yesterday.

Total revenue for national-level companies rose 2.2 per cent over 2019 to CNY30.3 trillion (USD4.7 trillion), according to Secretary General of the State-Owned Assets Supervision and Administration Commission (SASAC) Peng Huagang. Speaking at a news conference, Peng said profit rose 2.1 per cent to CNY1.4 trillion (USD215 billion).

The ruling Communist Party has built up such “national champions” over the past two decades, but their monopolies and multibillion-dollar subsidies prompt complaints by the public that they are a waste of money and gouge consumers with high prices.

Peng’s agency oversees 97 companies directly under the Cabinet including PetroChina Ltd, Asia’s biggest oil producer; China Mobile Ltd, the world’s biggest phone carrier by number of subscribers; and Industrial and Commercial Bank of China Ltd, the world’s biggest bank by assets.

SASAC companies also dominate air travel, insurance, securities, shipping, Internet access, power generation, construction, nuclear power technology and coal and steel production.

Residents pass by a branch of China Mobile Ltd in Beijing. PHOTO: AP

Chinese industries benefited from the economy’s relatively early re-opening starting in March after the ruling party declared victory over the virus that emerged in the central city of Wuhan in late 2019.

Total economic activity rose 2.3 per cent in 2020, possibly making China the only major economy to grow while the United States (US), Europe and Japan struggled with rising infections. Growth accelerated to a two-year high of 6.5 per cent over a year earlier in the three months ending in December.

Profit at 24 national-level state companies rose by more than 25 per cent over 2019 and two had profit of more than CNY100 billion (USD15.4 billion), Peng said, without identifying them or giving other details.

Total profit at top state-owned companies grew by at least double digits over a year earlier in each month after June, according to Peng.

Revenue growth accelerated to 11.7 per cent over a year earlier in December as China’s economy rebounded, reaching a record CNY3.7 trillion (USD570 billion), Peng said.

State-owned companies stepped up investment as part of the ruling party’s effort to support flagging economic activity.

Telecom carriers spent CNY373.1 billion (USD57.5 billion) on next-generation networks and other investments, according to Peng. He said spending by power suppliers on hydro, wind and solar technology rose 27.4 per cent over 2019 to CNY481.5 billion (USD74 billion).