China's Companies In Huge Losses in Foreign Countries | China Economic Fallout

China's Companies In Huge Losses in Foreign Countries | China Economic Fallout

China's Companies In Huge Losses in Foreign Countries | China Economic Fallout


In recent years Chinese state-owned enterprises (SOEs) have made inroads in expanding overseas, but little has been known about their financial returns. Recent reports say that most of them are showing huge losses, with mismanagement and corruption high on a list of reasons.

China’s three big petroleum companies–China National Petroleum Corporation (CNPC), ranked 6th among 2020 Fortune Global 500 companies; China Petrochemical Corporation, also known as Sinopec Group, ranked 5th among 2020 Fortune Global 500 companies; and China National Offshore Oil Corporation (CNOOC)–hold an industry monopoly and are hugely profitable enterprises in China. The third quarter financial reports by CNPC and Sinopec showed that their average daily earnings are about US$95 millions.

Yet their overseas projects are mostly a loss.

According to a midlevel official of the State Council’s Asset Supervision and Administration Commission (SASAC), the petroleum corporations’ overseas petroleum and natural gas exploration projects show a large loss, China Times said in a Dec. 30, 2020 report.

“It’s really difficult for overseas subsidiaries to perform well and show good results; most of their overseas projects are a loss,” another official, who works at an overseas department of one of the three state-owned petroleum companies, said.