China’s industrial profits decline eased to 6.7% YoY in July, compared to an 8.3% drop in June. For the first seven months of 2023, profits are down by 15.5%, slightly less than the previous year’s drop of 16.8%. However, concerns remain about the slowing economic recovery and deflation risks, especially as consumer and producer prices have registered their first synchronized decline since late 2020. Adverse weather conditions like heavy rains and flooding likely impacted industrial production in July.