A total of 1,784 major decisions made by China's state-owned enterprises (SOEs) failed to meet standards, causing losses or potential losses worth 4.56 billion yuan ($741 million), China's top auditor said Thursday.
Audits of 53 central enterprises showed that their competitiveness has significantly sharpened, but management still needs improvement, said Liu Jiayi, auditor general of the National Audit Office (NAO).
Their rate of return on equity has dropped from 10.9 percent in 2010 to the current 6.4 percent, Liu said in a report delivered at the ongoing session of the Standing Committee of the National People's Congress (NPC), China's top legislature.
The registration of 21 enterprises did not follow the Company Law. Forty-five enterprises have too many inner tiers, with the highest reaching 11 levels, Liu said.
Some enterprises falsified sales volumes or costs to reach their quota or evade taxes, he added.
The audits also showed that some companies blindly invested in the polysilicon, wind power and coal chemical industries.
Forty-five projects were launched without approval. The total investment for these projects had reached 58.3 billion yuan by the end of 2011, Liu said.
Innovation also needs to be improved, as technological investment at 53 enterprises lagged behind their production development, he said.