SOE hand-ins to state deemed inadequate in 2010

State-owned enterprises (SOEs) raked in profits of nearly 2 trillion yuan ($304.2 billion) last year, but official data shows that the government received only a small fraction of this sum considerably less than the firms are required to pay.

The SOEs, more than 120 in total, managed to shore up 1.98 trillion yuan, the Ministry of Finance announced last week, but no more than 44 billion yuan of that total was handed in to the central government, the Peoples Daily reported, citing data provided by the State-owned Assets Supervision and Administration Commission.

That is less than 3 percent of the total profits.

Last year, the SOEs were obligated to give 5 to 10 percent of their profits to the government. This year, the annual dividend has been adjusted to between 5 and 15 percent.

Prior to 2007, SOEs received a budget from the State but were not required to share their after-tax profits.

Jia Kang, director of the Research Institute for Fiscal Science at the Ministry of Finance, said, The contribution accounted for only a tiny part of the profits SOEs made, which does not conform to their earning performances and their access to huge public resources.

Currently, State-owned financial companies are exempt of the obligation.

If State-owned financial firms continue to enjoy the exemption, it will not only result in little contribution made from

SOEs, but also in unfair competition between different market players, Jia said.

The SOEs annual dividends paid to the central government are mainly used for industrial restructuring, technological innovation and as subsidies for reorganizations, the Peoples Daily report said.

However, only 1 billion yuan from those dividends in 2007 and 2008 was used to improve public welfare programs, including social security.

Deng Xiaofang, a primary school teacher from Hunan Province, said State-owned enterprises should share more responsibility.

Enterprises such as telecoms and petroleum companies have pr! ospered quickly in recent years, but they could not have earned as much without the governments support and domestic consumption, Deng said, adding that they should contribute more to improve public welfare.

SOEs have long been under fire by the public and in the media for their monopolies and high incomes, while exuding privilege and esteem.-Global Times


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