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Business trends

China's SOEs beat hamstrung private sector in profits

Signs of distortion emerge from Xi's emphasis on state sector

A petrochemical plant in China's Liaoning Province: State-owned enterprises on the upstream end of supply chains are less vulnerable to rising costs. (Photo by Shin Watanabe)

BEIJING -- China's state-owned enterprises have pulled ahead of the private sector in profitability this year, as private businesses grapple with an array of challenges including regulatory crackdowns, cash crunches and soaring material costs.

Big state industrial companies logged 1.77 trillion yuan ($275 billion) in total profits for the first eight months of 2021, up 87% on the year, compared with a 34% rise to 1.64 trillion yuan for their private counterparts, government data shows. The category covers enterprises in manufacturing, mining and similar industries with more than 20 million yuan in annual revenue from their main operations.

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