China’s largest shipping company avoided a third consecutive annual loss and a mandatory delisting from the Shanghai stock exchange last week, but the reprieve for China Cosco Holdings does not mean the tide is turning for the country’s heavy industry sector.
China Cosco, which eked out a profit of Rmb235m ($38m) for 2013 after losing more than Rmb20bn combined in 2011 and 2012, was bailed out by a series of asset sales to its parent company, highlighting a common theme among some of China’s largest industrial groups.
“They are not improving their operations to achieve profit, but just reorganising and selling assets,” says Zhang Wenkui, deputy director of the State Council’s Enterprise Research Institute. “They are only deceiving themselves.”