BEIJING (Reuters) – Profits earned by China’s industrial firms grew at their fastest pace in four months in July, aided by a pick-up in sales and reduced costs, the statistics bureau said on Saturday.

Profits in July rose 11% to 523.01 billion yuan, the National Bureau of Statistics (NBS) said, the fastest growth rate since March.

A production line is seen inside a factory of Saic GM Wuling, in Liuzhou, Guangxi Zhuang Autonomous Region, China, June 19, 2016. REUTERS/Norihiko Shirouzu/File Photo

“Although the growth in industrial profits has accelerated, we still haven’t seen an obvious pick up in demand in the market,” NBS official He Ping said in a statement accompanying the data.

He said challenges posed to strong industrial profit growth include rising management costs and the costs of tackling overcapacity.

Total profits for the January-July period rose 6.9% from the same period a year earlier, compared with a 6.2 rise in the first half of this year.

Profits in the mining sector fell 77% from the same period a year earlier while manufacturing profits rose 12.8 percent.

Chinese industrial firms’ liabilities at the end of July were 4.5% higher than at the same point last year.

The data covers large enterprises with annual revenues of more than 20 million yuan from their main operations.

(Reporting by Sue-Lin Wong; Editing by Simon Cameron-Moore)

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