Profits at China's state-owned enterprises declined in the first five months of the year, albeit at a slower pace, according to official figures released yesterday.

The total profits of the SOEs tumbled 30.3 percent from a year earlier to 425.4 billion yuan (US$62.3 billion) from January to May, after dropping 32.3 percent in the first four months, the Ministry of Finance said on its Website.

Profits fell 7.5 percent last month on a month-on-month basis.

"The major indicators are still in a downward cycle despite showing a slowing pattern," the ministry said.

SOEs controlled by the central government posted profits of 331.55 billion yuan in the first five months, down 23.3 percent, while those backed by local governments earned 93.85 billion yuan, down 47.4 percent, it said.

The ministry's survey doesn't include financial companies.

The tobacco, construction materials and petrochemical sectors saw improved earnings in the five-month period, the ministry said. Profits at the petroleum, machinery, automobile, electronic and chemical sectors continued to fall but the pace of decline has slowed.

Although the power industry was still in the red, it narrowed its loss. The steel, nonferrous metals and ocean shipping industries suffered a heavier loss, the ministry said.

China's economy is now at a critical stage, Premier Wen Jiabao said over the weekend as he reiterated the need for continued efforts to stimulate a recovery.

Economists at CITIC Securities said in a recent report that the overall industrial profits in China will likely stop falling and rebound within the year, as the recovery in the economy and industrial product prices are set to improve corporate profitability.

(Shanghai Daily June 23, 2009)