The steel and refining sector offered a fillip to Chinese economy as the country reported year-on-year increase of 8.4 percent in its industrial profit for the first nine months of the year.

According to the data released by the National Bureau of Statistics, China accumulated $685 billion in industrial profit from January to September this year.

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The data showed the steel sector leading the pack with 272.4 percent increase during the first nine months of the year, while oil refining earnings registered 263.8 percent increase.

Stabilized global commodity prices helped these sectors show stellar performance.

Bloomberg quoted Zhou Hao, an economist at Commerzbank AG in Singapore, as saying that China is trying to balance its need to curtail debt and churn out the profits at the same time.

However, the data disclosed that some concerns, as well as the electronics sector, showed a slowdown.

Meanwhile, He Ping, an NBS official said that despite the industrial profit being back on track, there are still some unfavorable characters to look into. He also pointed to weak domestic and international demand. Delayed payments are also adversely affecting the liquidity of the firms.

Increase in debt level is still a big cause of worry. These levels have been found particularly high in steel and coal sectors.

The government is currently implementing policy measures for reducing excess capacity in these sectors. China's debt is currently deemed to be at 250 percent of the GDP.  Various national and international financial institutions have issued warnings about the debt level. However, these seem to be under control after various steps have been taken by the Chinese government.

TagsNational Bureau of Statistics, china, Gross domestic product