China is expected to maintain robust growth momentum this year while making progress in reform and opening-up, despite escalating trade tensions that might create some unexpected downturn pressure, a senior official of the International Monetary Fund said on July 27.

Analysts said the effect of the China-US trade frictions on China’s macroeconomic fundamentals would be mild, although attention should be paid to the potential impact of an expanded scale of the disputes.

The country’s annual GDP growth rate is projected by the IMF to be 6.6 percent for the year, which remains unchanged from its May projection.

Adding to bullish signs that the Chinese economy is set to meet its high-quality development goals, the profit growth of the country’s major industrial companies picked up in the first half of the year.

Data from the National Bureau of Statistics showed on July 27 that profits at industrial companies grew by 17.2 percent from January to June, quickening from the 16.5 percent expansion for the January-May period.

“The Chinese economy is performing well, and reforms are making good progress, in particular in the financial sector. De-risking has advanced further. Credit growth slowed. Overcapacity reduction has progressed. Anti-pollution efforts intensified, and opening-up has continued,” said James Daniel, assistant director of the IMF’s Asia and Pacific Department.

The IMF suggested that China should stick to economic rebalancing moves, staying the course on strengthening macro-financial settings and improving credit efficiency.

Earlier this month, the government rolled out a slew of measures to boost financial support for small and medium-sized companies, while pledging to keep overall credit expansion appropriate.

Li Yang, head of the National Institution for Finance and Development, said: “Accumulation of risks in the past several years and recent trade frictions are imposing challenges on our ongoing efforts to implement reforms. It is quite crucial for China to stabilize turbulence amid reforms.”

The latest data show industrial companies have registered high profit growth amid the government’s ongoing campaign to contain debt risks.

China’s major industrial companies gained 658.29 billion yuan ($96 billion) of profits in June, up by 20 percent year-on-year, compared with 21.1 percent growth in May, data from the National Bureau of Statistics showed on July 27.

He Ping, chief statistician with the bureau, attributed profit gains to companies’ improved production capacity and producer prices that accelerated to the highest levels so far this year in June.

Efforts to implement supply-side structural reform have gained fruitful results, according to He, who cited a declining trend of corporate debt level.

In June, the asset-to-liability ratio of large-scale industrial enterprises was 56.6 percent, down by 0.4 percentage point year-on-year, data showed.

The asset-to-liability ratio of State-owned enterprises went down by 1.2 percentage points year-on-year to 59.6 percent, adding to signs of the structural improvement of State-owned enterprises as deleveraging efforts continued, according to He.