277 billion dollars in combined profits of Chinese state-owned companies in 5 months, a jump of 170%


Profits of China’s state-owned enterprises grew to a high level in five months of this year, as the country’s economic recovery trend continued, according to the results of Chinese official data yesterday.
The combined profits of state-owned enterprises rose 170 percent year on year to 1.79 trillion yuan ($277 billion) in the first five months of 2021.
The data published by the Chinese news agency “Xinhua” yesterday, indicated that the average profit growth for the same period in 2019 and 2020 amounted to about 13.5 percent.
From January to May, profits of centrally managed state-owned enterprises rose 130 percent year on year to 1.25 trillion yuan.
State-owned enterprises saw their total revenue increase 30.5 percent year on year to about 28.22 trillion yuan.
Revenues of centrally managed state-owned enterprises increased 27.4 percent year on year to nearly 16 trillion yuan.
The data showed that at the end of May, the debt-to-asset ratio of the country’s state-owned enterprises was 64.3%, down 0.2 percentage points from the same period last year.
On the other hand, analysts expect China to allow its imports of foreign cotton to increase this year, due to the US ban on cotton products grown in Xinjiang, which prompted some Western supermarket chains not to buy products in this region.
“A decision from the Chinese government is expected soon to allow the import of a new batch of foreign cotton after issuing licenses to import 700,000 tons of cotton last month,” Bloomberg news agency quoted Xu Yaguang, an analyst at China’s Huatai Futures Company, as saying.
And “Bloomberg” indicated that China had allowed last year to import only 400,000 tons of cotton.
The United States imposed a ban on all products containing cotton grown in the Muslim-majority region of Xinjiang earlier this year. And the famous Swedish clothing chain H&M announced its refusal to use cotton grown in this region as well in its products.
The region accounts for about 80 percent of China’s production of cotton yarn and about 20 percent of the world’s production.
And “Bloomberg” indicated that the increase in China’s imports of cotton will lead to more price increases in the world in light of the expected decline in production due to climatic conditions in many cotton-growing regions, whether in Xinjiang or in Brazil, in addition to the increase in global demand for clothing with a decline in the severity of the situation. Novel Coronavirus Pandemic. The price of cotton futures contracts increased by 44%, compared to last year.
Shanghai plans to increase the legal minimum wage from 2,480 yuan ($383) per month to 2,590 yuan per month, starting on July 1, which would make it one of the highest levels in the country, local authorities said yesterday.
The Shanghai Municipal Human Resources and Social Security Administration said the minimum hourly wage will be raised from 22 yuan to 23 yuan. The minimum wage does not include social security costs, housing allowances and overtime pay. This is the first time the city has raised the legal minimum wage since the outbreak of the Covid-19 epidemic.
In a related context, expectations indicate that manufacturers in the Greater Bay Area in China will witness a recovery in orders and sales in 2021, according to the Singapore newspaper “Lianhe Zaobao”, citing a survey conducted by Standard Chartered Bank.
“The performance of manufacturers in terms of orders, sales, employment, wages and capital expenditures will improve this year, reflecting China’s steady recovery from the COVID-19 pandemic,” survey participants said.
According to the survey, respondents seemed less enthusiastic about moving factories overseas compared to last year, citing weak labor cost pressures, China’s rapid economic recovery and the recent emergence of the epidemic in some potential relocation destinations among the reasons.
Standard Chartered said he believed that the Greater Bay Area would be able to meet the high expectations of businesses, as it has a wide range of growth drivers other than manufacturing, a large population, strong policy support, and rapid financial openness. , as well as the internationalization of the renminbi.
In addition, the net increase in foreign investors’ holdings of Chinese stocks and bonds amounted to $23.7 billion in May, according to data recently revealed by the National Foreign Exchange Commission.
The data showed that China continued to record regular cross-border capital inflows, as the country’s foreign exchange market is expected to remain generally stable.
“The two-way movement of the yuan’s exchange rate will become a normal situation,” said Wang Chunying, deputy director and spokesperson of the National Foreign Exchange Authority, in previous comments.
And the Chinese Central Bank had recently confirmed that it had raised the mandatory foreign exchange ratio with financial institutions from 5 to 7 percent, starting from the middle of this month.
The People’s Bank said in a statement posted on its website at the beginning of the month that this move aims to strengthen the management of foreign exchange liquidity at financial institutions.
This increase in the required reserve will make holding dollars and other foreign currencies more expensive for banks, and according to the latest available data, foreign currency deposits with Chinese banks amounted to about one trillion dollars.
The last time the People’s Bank of China raised the reserve requirement was in 2007 when it raised it from 3 per cent.
Commercial banks in China saw a net surplus of foreign exchange settlements of 146.8 billion yuan (about $22.81 billion) during the month of May, according to the National Foreign Exchange Authority.


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