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China says first-quarter profits of centrally-owned state firms up 13.1 percent

Employees work on the production line of a factory manufacturing fashion accessories in Sihong county, Jiangsu province, China March 27, 2019. REUTERS/Stringer/Files

BEIJING (Reuters) - Profits at China's centrally-held state firms rose 13.1 percent in the first quarter from a year earlier to 426.5 billion yuan ($63.57 billion), the regulator for state assets said on Tuesday.

That was slower than the 20.9 percent growth in earnings for the first quarter of 2018 and the 16.7 percent increase for the whole of 2018.

For March only, profits increased 10.8 percent on-year, slowing from the January-February gain of 15.3 percent, according to a statement by the State-owned Assets Supervision and Administration Commission (SASAC).

Fixed-asset investments at petroleum and petrochemical companies surged 39.3 percent in the first quarter, said SASAC spokesman Peng Huagang, adding that investments in the steel and coal sectors fell compared with a year earlier.

The world's second-largest economy is growing at its slowest pace in almost three decades amid weaker domestic demand and a nine-month trade war with the United States. Multi-year campaigns to curb debt risks and pollution have also deterred fresh investment.

The debt-to-asset ratio of centrally-owned state enterprises (SOEs) was 65.7 percent at the end of March, down 0.2 percentage point from one year earlier, according to SASAC.

The government has lowered its 2019 economic growth target to between 6 percent and 6.5 percent, from around 6.5 percent last year, while rolling out massive tax cuts worth nearly 2 trillion yuan ($298.15 billion).

To bankroll the tax cuts and support fiscal revenue, Beijing has said the government will collect more profits from certain state-owned financial institutions and centrally-owned firms.

($1 = 6.7080 Chinese yuan)

(Reporting by Stella Qiu and Ryan Woo; Editing by Richard Borsuk)