China's state firms face higher payments to govt

BEIJING: Chinese state-owned firms will have to hand over more of their profits to the government, a senior official said Tuesday, giving Beijing more money to spend on social services such as health care.

"The future tendency is for the payment ratio to be further increased," Shao Ning, vice chairman of the State-owned Assets Supervision and Administration Commission, told a news conference.

Shao did not provide an exact figure on how many "competitive" state-owned companies would be required to turn over; only saying the average amount paid out by listed companies would be at a "reasonable level".

State-owned companies handed over 60 billion Yuan ($9.12 billion) to the government last year, compared with 31.5 billion Yuan in 2009, Shao said.

But state media said state-owned companies turned over no more than 44 billion Yuan of the nearly two trillion Yuan they earned last year.

In December, Beijing hiked dividend payments by major state-owned companies to as high as 15 percent.

The central government owns many of the country's major companies such as Sinopec, Asia's largest refiner, and China Mobile, the world's biggest mobile operator by subscribers.

These companies have raked in enormous profits in recent years due to booming economic growth and government protection against their private-sector rivals.

Increasing dividend payments will boost Beijing's coffers and tallies with its oft-stated desire to improve social services and boost domestic consumption in order to reduce the country's heavy reliance on exports to drive growth.