Profitability of Chinese state companies fell between 2013 and 2024

A profitability of Chinese state companies deteriorated significantly between 2013 and 2024, in contrast to developments in Latin America and Africa, according to a report released today by the Organisation for Economic Cooperation and Development (OECD).

In the 2026 edition of the annual report on state companies, the OECD indicates that the percentage of Chinese public companies with losses increased from 17% in 2013 to 27% in 2024.

In the same period, the median return on equity (RoE) fell from 6% to 4%, while asset rotation decreased from 67% to 43%.

Some of these companies are accused of contributing to the oversupply of Chinese products on international markets, an issue which has fuelled trade tensions between Beijing and its main economic partners.

The OECD notes that the situation of state-owned companies has improved in Latin America and Africa, although it has mainly attributed this development to the strong presence of these companies in the mining sector, which has benefited from more favourable conditions.

In general, state companies have lower profitability levels than private companies.

The authors of the report, which analyzed data from 58 countries, including members of the organization, calculated that between 2013 and 2024, the average return on equity of state-owned companies was 4.7%, compared with 6.7% in private companies.

The analysis covered six sectors of activity: construction, industry, mining, real estate, services and wholesale trade.

State enterprises are also generally characterised by lower levels of investment in research and development (R&D) and lower capital accumulation.

The largest differences in profitability between public and private companies were recorded in the services and construction sectors, with a difference of about three percentage points.

For the purposes of the study, the OECD considered state-owned companies, those in which the State holds at least 25% of the capital.

The mining sector was, however, an exception to the general trend, with state companies having a median profitability of 10%, compared to 7% in private companies.

According to the OECD, this difference is partly explained by the strategic nature of mining, a sector characterized by a strong presence of governments and high levels of concentration.

State control allows these companies to operate on a higher scale and to benefit from privileged access to mineral reserves and licences granted by public authorities.

The study covered a total of 33,800 state-owned companies, with assets valued at USD 141 billion (about EUR 125 billion), the equivalent of 126% of the gross domestic product (GDP) of the countries analysed.

In 2024, these companies employed some 43 million people.

Chinese state-owned companies alone accounted for almost 26.5 million employees, more than three times the 7.4 million employed by all European state-owned companies.

Excluding the financial sector, Chinese companies concentrated 56% of the total State companies covered by the study, 61% of employment and 62% of assets.

In terms of the weight of state firms in national employment, Singapore led the list, with 16%, followed by Qatar (12%), Luxembourg and France (7%).

China, Norway, the United Arab Emirates and Slovenia had a proportion of 6%, while Serbia, Belarus, Sweden and Austria had 5%.