Further escalation of the trade war following the implementation of the most recent tariff hikes have driven down China’s industrial profits for the second consecutive month. According to data released by the NBS, industrial profits in China declined by 5.3% in September, worse than the 2% decline seen in August.

Industrial profits have been sliding lower for around a year now ever since the US announced tariff hikes on Chinese imports last year. Profits of industrial companies fell to 4.59 trillion yuan till September, 2.1% lower YoY and lower than the 1.7% decline seen till August this year.

The oil sector was the most severely impacted with profits of oil, coal and other fuel processing firms declining by 53.5% YoY in January-September. Meanwhile, state-owned industries experienced a 9.6% decline in profits till September this year.

On the release of this news, the Chinese yuan has edged lower against the US dollar so far. At the time of writing, USD/CNH is trading slightly bullish around 7.059.