State-owned firms inflate revenue by 29 billion US dollars

China's government auditor said that 18 of 20 audited state-owned enterprises (SOEs) have inflated revenue by 200 billion yuan (29 billion US dollars) and profits by 20.3 billion yuan (3 billion US dollars) in recent years.

According to a report released by the National Audit Office of China on Friday, the 18 companies have manipulated their financial reports by creating fake invoices and false sales, among other discrepancies, to attract more investors and have a positive image.

The 20 companies audited include China National Petroleum Corporation, China Huaneng Group, Sinochem Group, and China State Shipbuilding Corp.

The report further said that the 20 audited companies had put 38.5 billion yuan overseas investment and 60.6 billion yuan domestic investment at risk due to inadequate risk control measures and poor management.

In order to revive the country's bloated and debt-ridden state-owned sector, China has been accelerating mixed-ownership reforms.

China has completed 48 deals allowing private capital to invest in SOEs by June 20, according to China Securities Journal.

Yet the road has not always been smooth. Private investors are concerned about getting not enough say in management decisions. The issue of how to protect state-owned assets is also a challenge.

China's SOEs are a big part of the country's economy. They paid 530 billion yuan in taxes in the first quarter of 2017, up 7.5% year-on-year, according to the State-owned Assets Supervision and Administration Commission (SASAC).

(CGTN)