SOE earnings break record

Profits of China's state-owned enterprises grew 25% in 2005 to a record US$112 billion, the Ministry of Finance said Thursday. Vice Minister of Finance Zhu Zhigang attributed the rapid growth to sound macroeconomic practices, improved corporate governance, restructuring, and higher commodity and petrochemical prices. China's state-owned sector has been restructured since 1999 in order to contain losses and improve profitability, with unprofitable firms closed and others overhauled. Between 1999 and 2004 China cut 80,000 SOEs, or 37% of the total, and the number of SOE employees dropped 49% to 38.25 million. SOEs under direct control of the central government accounted for about 70% of total SOE profit.