Centrally-administered SOEs asked to raise profits by $15b by end-2017

China Petroleum & Chemical Corp employees inspect natural gas pipelines in Zibo, Shandong province. Sinopec's profit jumped to $1 billion during the first quarter of this year. [Photo/CFP]

China's 106 centrally-administered State-owned enterprises (SOEs) are expected to increase profits by more than 100 billion yuan ($15.3 billion), while reducing losses incurred by subsidiaries by 30 percent by the end of 2017, according to an executive meeting of the State Council chaired by Premier Li Keqiang on Wednesday.

During the meeting, Li again stressed that the centrally-administered SOEs need to "lose weight and get fit," an idea he brought forward in this year's government work report.

He called on them to exit orderly from non-core assets and control headcounts in sideline businesses and operations that suffer from consecutive losses so as to improve core competence.

The government will step up the elimination of outdated capacity, with a target of cutting steel and coal capacity owned by the centrally-owned SOEs by around 10 percent this year and the next year, according to the meeting.

The enterprises are also required to reduce their management levels to less than three or four from the current five to nine while cutting 20 percent of their subsidiary legal entities within three years.

They are encouraged to seek healthy development through innovation, playing a leading role in improving the country's innovation strengths.

The centrally-administered SOEs achieved 339.88 billion yuan of profits during the first three months this year, down 13.2 percent from the same period last year, according to statistics from the Ministry of Finance.