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Where do SOE dividends go?

(China Daily)
Updated: 2007-01-27 08:47

It is time for State-owned enterprises to give dividends to the State and the people, said a signed piece inBeijingYouth Daily. An excerpt follows:

Li Rongrong, director of the State-owned Assets Supervision and Administration Commission, told the national work conference on State-owned assets management on Thursday in Beijing that 159 central State enterprises earned profits of 754.7 billion yuan ($96.76 billion) last year, up 18 percent over 2005, while 1,031 provincial and municipal State enterprises earned 209.72 billion yuan ($25.89 billion) during the same period, up 38 percentyear-on-year.

SOEs have accumulated huge profits in recent years. As a result, their employees enjoy far better wages and welfare than the national average. The central government even had to issue a circular at the end of last year, requiring controls on the total wage distribution of SOEs.

Theirmonopolystatus is the major reason for the continuous increase in SOEs' profits. SOEs, especially those large-scale ones at the upper reaches or in basic industries, have a special ability to profit from customers and enterprises at the lower reaches.

At the same time, these profitable SOEs have not distributed their dividends to the State. A report by theWorld Banklast year pointed out that central government departments have not gained any dividends from SOEs.

As SOEs claim to be operating in the interests of the country and the people, they should distribute dividends to the country and the people now.