By Shangguan Zhoudong (chinadaily.com.cn)
Updated: 2007-09-14 14:13

China's central Stated-owned enterprises (SOEs) have been ordered by the State Council, the country's cabinet, to start paying dividends in 2008, according to a guide to Stated-owned capital operation released by the cabinet yesterday, the China Business News reported today.

Dividends are to be paid based on operating income, capital gains and proceeds from stock sales and assets transactions, according to the guide. The dividends will be spent on improving state economic layout, restructuring and reforming SOEs, and bolstering social security funds.

The Ministry of Finance and the State-owned Assets Supervision and Administration Commission (SASAC) will be responsible for collecting the dividends.

China's major SOEs reported a 33.5-percent rise in profits for the first seven months of this year, according to figures from the SASAC.

Total profits of the 417 major enterprises rose to 661.5 billion yuan (US$88.2 billion) in the January-July period, from 495.5 billion yuan a year earlier.

The power, metallurgical, transportation, automotive and foreign trade sectors rose by more than 67 percent, contributing 59.7 percent to the increased profits of the 28 sectors surveyed by the commission.

Statistics also show that, in 2006, profits of the country's central SOE's totaled a sizeable 754.7 billion yuan, up 151.1 percent from 300.6 billion yuan in 2003.

As of 1994, SOEs, including some profitable monopoly enterprises, had never paid after-tax profits to the government.