Monday, January 3, 2011

Communist Government or not, everyone loves a fat dividend...



Economic growth has been puttering along nicely in the Asian giant. Ok, so recent worries about the rising food prices have forced authorities to once again raise interest rates in an attempt to put a damper on inflation, but there's no reason why the government shouldn't reward itself for a good 2010 by taking a nice dividend out of its state-owned companies right?

The government's largest enterprises are all under consideration for dividend raises, which like most private companies are set to be paid out in Q2. State-owned energy, tobacco, telecom, and industrial giants are all looking at increasing the portion of bottom line profits paid to back to initial investor big-brother by 5% (the State-Owned Assets Supervision and Administration Commission expects that combined profits will exceed 1 trillion chinese Yuan).

While this action will reduce the amount that the enterprises will be allowed to reinvest in their businesses, the Chinese government highlights the need to help fund lagging state operations in education, healthcare, and social services.

Stateside: Wouldn't it be nice if we ask Phillip-Morris to help out with the budget deficit?


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