SOEs to pay dividends

China's cabinet, the State Council, said it will begin a program this year requiring profit-earning state firms to pay dividends to the government, but did not specify the criteria for determining dividend levels for companies, the Wall Street Journal reported. The program will initially require 158 state-owned enterprises to return a portion of profits to the state coffer. The dividend payments will come from these companies, which comprise the country's largest industrial enterprises, and many of which have listed units. The payments will be used to boost the country's overall industrial development, high-tech industries, and supplement the social security system, the State Council's statement said. The World Bank said it believes dividends from the proposal would help alleviate the country's annual investment growth rate, which has risen above 20% in recent years. Local SOEs; dividend policies will be determined by provincial and city-level governments. Earlier this week figures showing profits at major state-owned firms rose 34.7% year-on-year during the first four months of 2007 were reported.