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BIZCHINA / Review & Analysis
Redistribute SOEs' profits
(China Daily)
Updated: 2007-08-29 09:59
The profits earned by monopoly State-owned enterprises should be handed
over to the State so that they can ultimately benefit the public, says an
article in Oriental Morning Post. The following is an excerpt:
On Thursday, PetroChina, the most profitable business in Asia, reported a
first-half net profit of 81.8 billion yuan (US$10.8 billion), an increase
of 1.4 percent from the same period last year.
On hearing the news, common people should feel happy that our State-owned
enterprises are so profitable, despite the odds. However, at the same
time we cannot help asking whether the State or the public will benefit
from this huge profit.
PetroChina and several other State-owned enterprises (SOEs) enjoy
monopolies in their sectors, and they have benefited a lot from their
exclusive use of national resources.
The State is entitled to the profits earned by SOEs, but it has not
collected them for more than a decade under a scheme to promote SOE
reform that was launched in the early 1990s. Meanwhile, PetroChina and
Sinopec also get State subsidies under different names. For example, the
Ministry of Finance gave a 10 billion yuan?tax rebate to PetroChina in
2005 to help it cover its losses in refinery projects.
The central government is putting together a plan to redistribute profits
earned by State-owned enterprises. Before that plan is formally worked
out, PetroChina and its peers will not hand over their profits to the
government, which is to say they will not be used for the public welfare.
Monopoly SOEs have been criticized for giving higher-than-normal pay
packages to their employees, especially those in high-level management
positions.
Ignoring public displeasure over the situation, PetroChina raised
salaries by more than 30 percent in the first half, involving more than
5.4 billion yuan.
(For more biz stories, please visit Industry Updates)
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