China’s industrial output grew the fastest in the first half over the past three years due to the country’s restructuring and upgrading, the Ministry of Industry and Information Technology (MIIT) said. Industrial output expanded 6.9% from a year ago in the first six months, the quickest since 2014, said MIIT Spokesman Zheng Lixin, adding that the growth resulted from supply-side reform and technology upgrading. By the end of June, China has cracked down on low quality steel and cut overcapacity in industries like cement and aluminum. Electronics and equipment manufacturing led industrial growth over the first half, with output surging 13.9% and 10.9% year-on-year respectively. Meanwhile, revenues of domestic industrial firms rose 13.5% over the first half year from a year ago – 10.6 percentage points higher than last year – while profit surged 22.7% annually, 11.6 percentage points faster from the same period last year, the Shanghai Daily reports.

China’s major industrial companies posted faster profit growth in June amid higher sales and increased efficiency. They reported a profit rise of 19.1% year-on-year to CNY727.8 billion last month, 2.4 percentage points faster than in May. Equipment manufacturing took a 40.7% share of profits in June, up 11.3 percentage points compared to May, while mining accounted for 22.1%, down 13.4 percentage points. Companies have improved their profitability, lowered costs and cut their debt ratio as a result of the supply-side reforms. According to the National Bureau of Statistics (NBS), 38 of 41 industries surveyed reported a growth in profits, led by the coal and metal industries. For the first half, profits rose 22% to CNY3.63 trillion. Profits at China’s state-owned industrial enterprises were up 45.8% at CNY805.5 billion in the first half. Private companies reported a 14.8% increase in profits to CNY1.19 trillion in the first half. The corporate leverage ratio continued to decline. Debt-asset ratios of major industrial firms dropped 0.8 percentage points year-on-year to 55.9%. Despite a general improvement, data related to financing costs rose, indicating higher funding pressure on companies.