China’s major industries registered slower profit growth in July, but a senior official at the National Bureau of Statistics said on Aug 27 that overall data show the country’s supply-side structural reform has continued to make progress.

Profits of the country’s major industrial companies last month rose by 16.5 percent from a year earlier, the bureau said on Aug 27. The figure was 2.6 percentage points lower than in June, but still significantly on the plus side.

In the first seven months as a whole, profits of major industrial enterprises rose 21.2 percent year-on-year, compared with 22 percent in the first half of this year, the bureau said.

The data cover companies with annual revenues of more than 20 million yuan from their primary operations.

The cooling of profit growth was mainly the result of seasonal factors, such as extreme weather conditions, the bureau said on its website.

“Short-term noneconomic factors, such as vacations and disrupted production caused by extreme high temperatures, have led to slower growth of profits,” it said.

The figure should not be interpreted as a sign of a weakening of the Chinese economy since, apart from extreme weather, it is mainly related to the relatively high base figures of last year, according to a research note by CITIC Securities. China’s economic fundamentals remain solid, and both its domestic and external demands are rising, which will bolster growth in the coming months, it said.

The manufacturing sector, which accounts for 88 percent of industrial profits, saw profit growth of 18.1 percent in the first seven months, slightly down from 18.5 percent in the first half. But mining industries registered profits that were 7.9 times those of a year ago because of price increases in recent months.

Major State-owned industrial enterprises recorded profit growth of 44.2 percent in the first seven months, while that of private companies was 14.2 percent, the bureau said.

On the whole, as the supply-side structural reform continues, overall corporate earnings are improving, the statement said.

China has made efforts to push forward its supply-side structural reform to shrink excessive production capacity, cut corporate debt and reduce costs for enterprises, among other things.

He Ping, a senior official at the NBS, said the July data show that China has continued to make headway in those areas. In July, for example, the asset-to-liability ratio of major industrial enterprises, which reflects debt levels, was 55.8 percent, down by 0.7 percentage points year-on-year, He said, adding that the profit-to-revenue ratio of those enterprises’ core businesses was 5.97 percent, 0.33 percentage points higher than a year ago