China's industrial profit grew 19.5 percent in the month of August, its highest rate in three years.

This hows that the world's second largest economy is stabilizing after a phase of turmoil. The industrial profits for the month stood at $80 billion, the National Bureau of Statistics (NBS) revealed.

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The biggest boost to the numbers came from steel and oil refining sector. This data aligns with the view that increase in construction activities and state infrastructure projects are providing strong support to the overall economy. The same report also showed that rail freight in August was up one percent from a year earlier, the first increase since December 2013.

Reuters quoted Liao Qun, chief economist at Citic Bank International, as saying that gross domestic production may show higher growth  rate in the third quarter, which will range from 6.7 to 6.8 percent, compared to the first or second quarter.

Raymond Yeung, chief greater China economist with Australia & New Zealand Banking Group Ltd. in Hong Kong, said property market boom and higher commodity prices contributed to the increase in industrial profits. However, the growth rate has been uneven across the sectors with mining sector showing 70.9 percent fall in its profits.

The Asian Development Bank, on the other hand, increased its annual growth forecast for China. The bank now expects the economy to grow by 6.6 percent, up from its previous estimate of 6.5 percent. Various monetary and fiscal measures taken by the Chinese government are behind the higher estimates.

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