Metal smelting furnace in Chinese steel mills Photo: iStock

The current financial environment is the main factor for the improvement of the operating efficiency of China’s state-owned enterprises over the past year, Wang Tao, Chief China Economist of UBS, said in an interview with Yicai.com.

“Our economic growth is in speed (and) the demand side also saw a rebound,” Wang said. “On the other hand, there are also supply side reforms such as limiting production, so that the performance of upstream steel, coal and some other industries has significantly improved. Both the price and the output amount has also increased. This benefits the enterprises a lot.”

Commenting on the general trend of China’s economy, Wang said that her research shows that the economy bottomed out in the first quarter of 2017, and was followed by a rebound.

“We reached the bottom in the first half of this year, so the growth rate in the second quarter is relatively fast,” Wang said. “With the strengthening of the supervision, the economy is expected to slightly slow down in the future.”