State Firms Survive Close Call with Derivatives

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A legal controversy over financial derivatives, which were blamed for tens of billions of yuan in booked losses among centrally administered state-owned enterprises (SOEs) last year, has basically vanished.

Li Wei, deputy director of the State Assets Supervision and Administration Commission (SASAC), said in late 2009 that 68 central enterprises using financial derivatives had lost 11.4 billion yuan as of October 2008. Of these, 28 had invested in derivatives outside their main business fields, and most involved complicated, high-risk transactions.