(Yicai Global) March 26 -- Earnings at China's state-owned enterprises rose an average 10 percent in the first two months of this year from a year earlier on the back of rising sales in key sectors such as energy and logistics, while their spending on research and development also jumped dramatically.

Total profit at SOEs stood at CNY452 billion (USD67.4 billion) for January and February, the latest finance ministry data show. Research and development outlays, released for the first time, climbed almost 25 percent. The ministry did not provide an amount for R&D expenditure.

The 96 companies controlled by the central government had overall profit of CNY332.7 billion, an increase of 14.3 percent, while those affiliated with local governments saw earnings drop 0.5 percent to CNY119.3 billion.

The Ministry of Science and Technology and the State-owned Assets Supervision and Administration Commission have encouraged SOEs to boost their R&D investment and report the amounts in their business performance reviews, according to a joint report released last May.

Operating costs at state firms rose nearly 7 percent to CNY8.4 trillion (USD1.3 trillion) in January and February, with R&D outlays taking up an increasing portion of that. Local SOEs splurged 66 percent more on R&D.

Profits at key industries such as oil and nonferrous metals increased. Sales volume of refined oil products rose nearly 10 percent, that of natural gas climbed 7 percent, and the increase for electricity was 5 percent. Shipping turnover rose 13 percent, while aviation's gained 9 percent, SASAC Director Xiao Yaqing said during recent annual political gatherings in Beijing.

China still has great economic growth potential, he added. 

Operating income at SOEs rose 6 percent to CNY8.7 trillion, 4 percentage points lower than last year. Revenue was CNY5.2 trillion, a jump of 5 percent. Locally controlled SOEs increased their income streams by 8 percent to CNY3.5 trillion.

The debt-to-asset ratio of all Chinese SOEs fell 0.3 point to 64 percent at the end of February, as central and local SOEs both trimmed their debt burdens.

Editor: Emmi Laine