BEIJING The Chinese government has approved
54.8 billion yuan ($8 billion) in aid to state-owned firms to
help them ride out the global financial crisis.
The State-owned Assets Supervision and Administration
Commission, which oversees more than 150 big companies, said
about 49 percent of the money would be used to increase its
ownership in those firms.
The rest would be spent on helping the companies to expand
and restructure or to recover from a string of natural
disasters that has hit China this year, including May's Sichuan
In a statement on its website (www.sasac.gov.cn), SASAC did
not list which companies would receive funds.
China Southern Airlines (1055.HK), the country's top
carrier by fleet size, said on Wednesday that it would get a
$440 million capital infusion from the government. Its peer
China Eastern Airlines (600115.SS) (0670.HK) said on Thursday
that its parent was also applying for a capital injection from
SASAC said its purpose was to complement major changes
recently in China's macroeconomic policy changes. Its
initiative will play a positive role in helping state firms
overcome the impact of the global financial crisis, the agency
said. It said the spending was off-budget and would be financed
from dividends it had collected from state firms in the past
two years. Last year, SASAC ordered state firms to make
dividend payments equivalent to 5 or 10 percent of their net
profits, depending on which industries they are in.
It collected about 16 billion yuan from these firms in
respect of 2006 earnings, the official China Securities Journal
said on Thursday. It did not give a figure for 2007.
(Reporting by Langi Chiang; Editing by Alan Wheatley)