SOEs see total profit fall 16.4% in 1st half

TOTAL profit for China's biggest state-owned companies fell 16.4 percent on an annual basis in the first half of this year as an economic slowdown deepened, the government said yesterday.

The squeeze for even China's biggest companies that benefit from low-cost loans highlights the extent of the deepest slump since the 2008 global crisis as exports and domestic demand weakened.

Combined profit for the 117 companies in the top tier of state industry fell to 387 billion yuan (US$61.4 billion) for the six months ended on June 30, the State-owned Assets Supervision and Administration Commission said in a one-sentence statement.

The statement said profit in June was up 8 percent compared with May but gave no indication whether the government saw that as a sign growth was reviving. It gave no details of individual companies.

China's economic growth slowed to a three-year low of 7.6 percent in the second quarter. Analysts said the decline probably has bottomed out but they said the strength of a possible recovery is uncertain.

China has cut interest rates twice since the start of June and is pumping money into the economy through higher investment by state-owned companies and more spending on low-cost housing and other public works.

Authorities are trying to use targeted measures instead of flooding the economy with money.