2010-11-04 10:28

BEIJING- China may order State-owned companies to pay dividends of up to 30 percent every year, pending cabinet approval, the Shanghai Securities News reported on Thursday.

Most Chinese State firms pay 5 percent dividends now, with those in resource industries, including tobacco, power, petrochemical and coal, paying 10 percent.

"The dividend rate by State firms may be increased to 5-30 percent, but the proposal has not been finalised yet," the newspaper reported, without citing any sources.

Part of the dividends will be given to China's social security fund, it added.

The World Bank and others have argued that the government should claw back a larger share of State-owned firms' profits to reduce excess corporate savings, which are mostly ploughed back into new investment.