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Key state-owned enterprises (SOEs) maintained solid growth in the first half of 2006, as they became more energy-efficient.

China's 166 central SOEs, the biggest SOEs directly supervised by the central government, realized 351.65 billion yuan (US$43.96 billion) of profits in the six months, a 16 percent increase from the same period a year ago.

According to statistics released by the State-owned Assets Supervision and Administration Commission (SASAC) yesterday, the companies produced added value of 1.08 trillion yuan (US$135 billion) in the period, up 16.8 percent from a year ago.

Their sales revenue also climbed by 20.6 percent.

A SASAC spokesman said the result was largely driven by a stable growth of coal, oil and power production as domestic demand for energy continued to increase.

Higher sales of iron and steel products and automobiles, as well as more energy-efficient production models also contributed to the growth.

In the first half of the year leading coal producers Shenhua Group Corp and China National Coal Group Corp jointly produced 1.39 trillion tons of crude coal, up 14.5 percent year-on-year. Domestic coal sales also rose by 15.9 percent.

The five major power companies, including the State Grid Corporation of China and China Southern Power Grid, also altogether generated 513.8 billion kilowatt-hours in the first two quarters, 12.5 percent higher than a year ago.

Oil and natural gas output from China's three biggest oil companies Sinopec, China National Petroleum Corp and China National Offshore Oil Corp, grew by 5.8 percent in oil and 26.7 percent in gas during the period.

But compared to the past, the big enterprises focused more on structure upgrades and innovation to better allocate resources and control costs.

For example, Shanghai-based steel giant Baosteel, saw its general consumption of energy in steel production decrease by 3 percent in the first five months, while its energy recycling capabilities improved substantially.

Lower costs in energy consumption helped the company increase its efficiency by 3.3 billion yuan (US$412.5 million) in the first five months, company sources said.

(China Daily July 26, 2006)