Expanding liabilities aggravate SOE operational risks: official

Seventy-six of the 165 centrally-managed state-owned enterprises (SOEs) saw their liabilities grow faster than assets over the first half year, triggering concerns about aggravated operational risks.

In 26 companies, liabilities grew 10 percent faster than assets, and in four companies the figure was 30 percent or higher, according to the latest statistics from the State-owned Assets Supervision and Administration Commission.

In another 84 companies, liabilities growth outpaced the expansion of creditor equity.

Commission Chairman Li Rongrong warned here on Wednesday that SOEs should be prudent in their business expansion plans and avoid relying too much on debts and loans.

About 40 percent of the centrally-managed SOEs have seen costs expand faster than sales revenue, he noted.

Nearly 7 percent of the SOEs lost money. Their aggregated deficits totaled 2.52 billion yuan for the first half of the year, up 470 million yuan year-on-year.

Twenty-three companies, meanwhile, posted a net profit of less than 20 million yuan. Three of them reported a fall in net profits, he said.

Source: Xinhua