Yet another evidence of weakness from China, where conditions seem to have eased in recent times. Rising stock market around the world, makes turmoil at beginning of the year makes a fading memory. House prices are rising at fastest pace in months, steel mills have started firing all engine, industrial production edged up to 6.8% and all thanks goes to government’s decision to fiscal expansion.

But profitability at state firm declined in double digits, revealing that underlying weakness remains. Total profits in first quarter, in China’s state owned firms declined 13.8% y/y to Yuan 432 billion, according to figure released by Ministry of Finance. Profits decline was much faster this year, compared to 2015, when profits declined 6.7% y/y.

According to the report, profits saw large decline in coal, Steel, non-ferrous metals and Tobacco industries, whereas Petro-chemicals and Pharma sector saw large gains.

Overall revenue declined 3% y/y to Yuan 9.95 trillion. State owned firms under central government supervision saw 4.6% y/y decline but those operated by local government saw just 0.1% y/y decline. But for local government administered forms saw larger profit dip of 15.8%, compared to 13.2% y/y, administered by central government. But March seems to have been better local state firms, as profits decline was larger at 40.9% for first two months.

Second quarter results will be much more vital as effects of recently introduced stimulus kick in.

China's benchmark stock index Shanghai composite is up 0.6%, trading at 2965.