Nearly 25 Percent of State Companies Losing Money
BEIJING (AP) _ Nearly one out of every four state enterprises in China lost money in the first quarter of the year, with deficits running 42 percent higher than in the same period of 1986, an official daily said today.
The English-language China Daily said 8,915 state-run industrial enterprises - 23 percent of those listed in the national budget - operated at a loss, up by 933 over the previous year.
Total losses were $410 million, it said.
It attributed the losses to rising raw material and production costs, slow sales of shoddy goods and poor management.
State-owned factories account for about 70 percent of China’s industrial output. The government is trying to make them more efficient by giving factory directors more responsibility and allowing factories to keep anything in excess of contracted profits.