China Youth Daily published an article that reported on the publicly traded State Owned Enterprises (SOEs) that had released their annual reports. By April 16, among 1,725 SOEs, after their nonrecurring profits and losses, 144 of them showed a negative net profit for three consecutive years. The cumulative loss totaled 140 billion yuan. Most of these companies were in the steel, chemical, coal, cement, and glass industries. Half of them incurred losses exceeding hundreds of millions of yuan each year. The report indicated that, out of these 144 “zombie companies,” 122 of them relied on supplemental funding from the government to survive. That total amounted to 30.7 billion yuan (US$4.74 billion) over the past three years. The article reported that, since April 30 is the deadline for filing their annual reports, there will be more zombie companies that have not yet filed. Therefore, the total number of zombie companies could be as high as 270 this year.
Source: China Youth Daily, April 18, 2016