In some ways, it is little surprise that China’ state-owned businesses are underperforming, even as GDP growth hit a healthy 8.9pc in the third quarter.
The Ministry of Finance says that profits at SOEs fell by an average of 17.6pc in the first nine months.
And in fact, there seems to be month-on-month declines ever since the stimulus cash was cut off. Profits were up 29.4pc between May and June, but down 2pc in July, up 4.3pc in August and then down 12pc in September.
Li Chao, the spokesman at the NBS said that "the industrial production growth of some sectors is still relatively slow" and that "corporate profits are falling sharply".
We already know that the bulk of China’s GDP growth this year has come from investment. The stimulus cash went on building infrastructure and helping SOEs retool.
What is surprising – and a touch disturbing for China bulls – is that despite all this cash to get themselves back on their feet the SOEs are getting less and less efficient.
Total revenues for the first nine months was only down 1.7pc, but profits dropped 17.6pc. The companies are making less profit on almost the same sales. The average net return on assets, meanwhile, was down 5.1pc compared to two years ago.
So the question is: what on earth did those companies spend that stimulus cash on if their profits are still falling month-on-month?