China calls for state-owned firms to stabilize economy amid trade war
Jun 18, 2019 (China Knowledge) - China’s 97 largest industrial conglomerates also known as the country’s national champions have been asked to act as stabilizers in its national economy to offset effects of the trade war with the United States by increasing their profits by 9% this year.
In addition, 20 of these 97 companies which operate as monopolies in their respective industries such as the China Aerospace Science and Technology Corporation, China National Petroleum Corporation and State Grid Corporation of China have also been asked to hit a 12% profit growth this year.
The target set by the State-owned Asset Supervision and Administration Commission (SASAC) comes after the combined profits of the country’s industrial companies fell by 3.4% during the first 4 months of this year according to data from the National Bureau of Statistics (NBS).
Overall, the aggregate profits of state-owned or state-controlled industrial enterprises fell by 9.7% year-on-year to RMB 570 billion during the first 4 months of this year.
The move highlights a continued reliance by China on its large state-owned firms to drive its economy despite repeated calls from its trading partners such as the US and the European Union to reduce the role of state companies in its economy.
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