Friday, September 19, 2014

Dramatic Increase on State Support in China

Subsidies accounted for four-fifths of the profits reported by Chinese steel companies in the first half of this year, a dramatic increase in reliance on state support that illustrates starkly the industrial weakness that is an increasing drag on the economy.

The headwinds faced by China’s massive steel sector – falling profit margins and growing dependence on handouts – are shared by other key industrial and infrastructure-related sectors, including aluminium, cement and coal.

A Reuters analysis of first-half financial statements from 77 listed Chinese steel, aluminium and cement companies revealed a sharp deterioration in profitability.

CNBC

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