SOEs to pay dividends to the government

October 02, 2006 | BY

clpstaff &clp articles

China is expected to release rules requiring state-owned enterprises (SOEs) to submit their dividends to the government from the beginning of 2007. The…

China is expected to release rules requiring state-owned enterprises (SOEs) to submit their dividends to the government from the beginning of 2007. The rules, which originate from the Ministry of Finance and the State-owned Assets Supervision and Administration Commission (SASAC), are currently under review by other government departments.

The rules generally outline principles and directions for state-owned capital budgets, with detailed regulations on the proportion of profits to be paid out and how they should be used. The payouts will likely go towards public utility projects and funding industrial development.

According to a World Bank report, if China's SOEs offers 50% of their profits to the government (accounting for 6.5% of the country's gross domestic product in 2004), China would see an 85% increase in public funding for education and healthcare.

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