A Chinese government watchdog has warned major state-owned enterprises to brace for tough times given the likelihood of a worsening global economic slowdown, state media reported yesterday.
Chinese state-owned enterprises (SOEs) must pay more attention to their financial position to avoid a potential capital crunch, the Economic Observer reported, citing Li Rongrong (李榮融), director of the state-owned Assets Supervision and Administration Commission.
“Keep a close watch on your pockets and do not deplete yourselves,” said Li, who talked at a recent meeting to senior executives from 150 SOEs directly controlled by the central government.
Li said the SOEs should better prepare themselves for tightening monetary policy lasting at least two years, the report said.
The meeting was held after figures showed that combined profits of the major SOEs in the first quarter dropped 2.9 percent from a year earlier to 203.4 billion yuan (US$29.1 billion), it said.