In the first 11 months, SOEs raked in a combined profit of 1.81 trillion yuan ($272.2 billion), skyrocketing 43.1 percent from a year ago, said the Ministry of Finance. But on a month-to-month basis, the November profit dropped 2.6 percent from October.

Their revenues totaled 27.34 trillion yuan ($4.1 trillion), an increase of 32.5 percent year on year.

Meanwhile, the SOEs made progress in profitability as their profit-to-sales ratio came in at 6.6 percent, 0.5 percentage points higher than the previous year.

Despite a rosy picture, many sectors suffered a decline in profits, including the transportation, textile, petrochemicals and electronics industries.

Stimulating State Assets

China on December 22 officially inaugurated the Guoxin Asset Management Co., a state-owned assets management firm, in a move to accelerate state-owned assets restructuring and help turn small and unprofitable SOEs into money-making entities.

Xie Qihua, former Chairman of Baosteel Group, was appointed chairman of the new company, and Liu Dongsheng, a senior official of the State-owned Assets Supervision and Administration Commission, became general manager.

"Establishment of Guoxin is intended to beef up mergers and acquisitions of centrally administered SOEs," said Wang Yong, Minister of the SASAC. There are currently 122 central SOEs in China, down from 196 in 2003.

The new company has initially registered capital of 4.5 billion yuan ($676.7 million) and has become the third asset management company under the SASAC, which designated China Chengtong Group and State Development and Investment Corp. in 2005 to take over loss-making non-core businesses from central SOEs.

A number of smaller, less competitive central SOEs without clear-cut major business lines will be packaged into Guoxin, said Wang.

Aviation Slowdown

China's aviation sector is getting back on recovery track, though growth tapered off in November.

The industry generated a net profit of 1.55 billion yuan ($233.1 million) in November, a modest increase of 4.8 percent from a year ago, said the Civil Aviation Administration of China. The figure, however, represented a sharp drop from the 4.92 billion yuan ($741 million) in October.

November and December have always been off-peak seasons for airlines as the winter freeze dampens the demands of tourism, said Li Jian, an analyst at the China Securities Co. Ltd.

In November, passenger volume shrank 15 percent month on month to 20.78 million.

In addition, the National Development and Reform Commission on December 21 announced a 5-percent increase in aviation fuel, fuelling cost inflation for airlines.

"Despite near-term traffic headwinds, we reiterate our positive long-term optimistic view on traffic, which is expected to grow 15 percent in 2011 and 2012 due to sanguine expectations on China's economic growth, coupled with increased propensity to travel, as domestic consumption expands," said Goldman Sachs in a recent report.

Asia's Fortune

The 2010 Third Annual Conference of the Asia Fortune Forum was held on December 16-18 in Beijing, with the theme of a "sustainable share of Asia's fortune." The three-day event brought together hundreds of entrepreneurs and economists to discuss business innovation and the economic outlook of the region.

The Chinese economy has come to a critical stage of rebalancing, said Yao Jingyuan, chief economist at the National Bureau of Statistics. "The key is to wean off the reliance on investments, labor-intensive manufacturing and the real estate industry as a source of growth."

Zhuang Congsheng, Vice Chairman of the All-China Federation of Industry & Commerce, said it is necessary to foster the private enterprises providing 85 percent of the country's new jobs.