Profits at China's state-owned firms rose 9.8 percent in 2009, the Ministry of Finance said on Tuesday, reporting the first 12-month period of positive growth since late 2008, when corporate earnings were hit hard by the global economic downturn. The growth was a big improvement from the 1.9 percent drop in the first 11 months and 10.6 percent decline in the first 10 months.

Profits at State-owned enterprises (SOEs) rose 23.8 percent in December from November, the ministry said in a statement on its website (www.mof.gov.cn). Profits totalled 1.34 trillion yuan ($196.3 billion) in 2009, the statement said, driven largely by the petrochemical, auto, property and building materials industries. It did not give a figure for December alone, but calculating from the previous month's total shows profits in December were about 150 billion yuan.

Enterprises controlled by the central government posted combined profits of 944.5 billion yuan last year, up 10.3 percent from a year earlier, while those backed by local governments registered profits of 394.7 billion yuan, up 8.4 percent. Inventories at SOEs rose 16.2 percent in 2009, up from 10.7 percent in the first 11 months. The improvement in state firms' profits added another element more optimistic colour to the broader recovery in the Chinese economy, which saw stronger then expected year-on-year growth in both exports and imports in December.

Copyright Reuters, 2010