Analysts at TD Securities note China’s 9.9% YoY decline in industrial profits in October is the third straight YoY decline revealing that profits are worsening.

“The outcome was the biggest drop since 2011 (when the series began). Weakness in profits reflects ongoing deflationary forces in the economy as reflected in PPI and core CPI. Profits remain under pressure as manufacturing remains in contraction (PMIs) and tariffs are maintained. Unfortunately, there is little hope of a turnaround soon, keeping policy makers on track with the drip feed of targetted monetary easing while pushing for a trade deal.”