At a State Council meeting on May 30, Premier Wen Jiabao and his
colleagues were reportedly exploring the plan of State-owned
enterprises (SOEs) paying dividends to the government. The news
triggered media comment. Two excerpts follow:
Yangzi Evening News:
If the plan comes true, it would end the 12-year period during
which the State did not get any dividends from the enterprises it
owns.
Analysts say that if the SOEs owned by the central government
were to achieve a total after-tax profit of more than 700 billion
yuan ($92.1 billion) in 2007, coupled with the 300 billion yuan
($39.7 billion) in net profits of SOEs owned by local governments,
the total net profits of SOEs would top 1 trillion yuan ($131.8
billion) this year.
The dividends to be given to governments at all levels would
provide a considerable amount of income.
The money should be spent addressing issues concerning the daily
life of common people.
In recent years, the SOEs have turned from money losers into
cash cows, not only as a result of economic reform but also thanks
to the suspension of dividend collection by the State.
While the common people experience increasing pressure from
education, housing and medical care costs, many of the SOE managers
are seeing their pay double, triple or reach even greater
heights.
Sponsored with State money, the SOEs belong to all the people.
So the authorities should use the money to benefit the most people
after the State gets its due share of SOE profits.
Beijing Youth Daily:
The SOEs have achieved their current prosperity because the
central government made necessary arrangements in the last decade
to nurture them.
It is now natural for the SOEs to reward the State's patience
and support with an appropriate portion of their huge profits.
The State is to enjoy its stockholder right in the SOEs, which
is in accordance with a basic rule of the market economy: Investors
should get their profits.
Based on SOE profits in 2006, the State would get 11 billion
yuan (US$1.45 billion) in dividends if it receives 1 percent of all
net profits.
The government would have more for the public budget, which
could definitely boost public well-being.
The fat SOE profits have not only paid for the
higher-than-average salaries of SOE employees in some monopoly
industries, but they have also propelled the SOEs into blind
investments disregarding State efforts to prevent economic
overheating.
After the SOEs hand out dividends to the State, they will also
be relieved of their impulse to invest.
(China Daily June 5, 2007)