That share has now dropped to 35 percent. Half of SOEs lose money, and the profit from the other half accounts for just 1 percent of the country's entire gross domestic product. The government has forced SOEs to borrow from banks since the mid-'80s in hopes of getting them off the government dole. A fifth of SOE assets are nonproductive items such as employee apartments, schools and clinics.
Equipment is old, production methods are shoddy and bookkeeping is a shambles.
Last year SOEs fired more than 10 million workers or cut their wages. More are likely to be fired this year.