Trade war blues, dismal domestic data and a slowdown in global growth are playing havoc with China’s economy.

On Wednesday, the National Bureau of Statistics reported that industrial profits shrank 9.9% in October to 427.56 billion yuan, or US$60.74 billion, compared to the same period last year.

Whichever way you crunch the numbers, the figures were shocking compared to September’s fall of 5.3%. Even the 10 months between January and October saw profits dip by 2.9% from a year earlier to 5.02 trillion yuan, or $710 billion.

“We expect industrial profit growth to remain sluggish, given the deteriorating growth outlook and elevated uncertainty amid the US-China trade conflict. In our view, Beijing will likely roll out more easing measures in [the] coming months,” Nomura, the Japanese financial group, stated.

Signs of stress had already appeared with a sharp downturn in consumer spending and factory production.

Industrial output expanded by just 4.7% last month compared to 5.8% in September. Moreover, that was below analysts’ expectations of 5.4% and just 0.3% up from August’s 17-year low of 4.4%.

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Another key driver of economic growth, fixed-asset investment, expanded at 5.2% in the first 10 months, the lowest recorded since records began in 1996, according to the Reuters news agency.

To underline the depth of the downturn, retail sales in October matched April’s 16-year low despite increasing by 7.2% compared to the same period last year.

Significantly, the raft of depressing data has underscored weakness in the domestic economy, which has been buffeted by the trade row with the United States. In the third quarter, GDP growth slipped to 6%, the slowest rate in nearly three decades.

Still, the figures released for industrial profits confirmed the depth of the slump.

“The October fall was an acceleration from the drop in September mainly due to a bigger decline in the output price of industrial products, slowing growth of production and sales and other factors,” Zhu Hong, a senior statistician at the National Bureau of Statistics, said in a statement.

At least, there was more positive news overnight after US President Donald Trump revealed that Beijing and Washington were close to a phase-one agreement and were in the “final throes of a very important deal.”

His comments came after China’s Vice-Premier and lead negotiator Liu He discussed key sticking points with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.

“[The two sides had] reached a consensus on properly resolving related issues,” the Ministry of Commerce in Beijing said after the talks without going into details.

Since laying down the groundwork for an interim accord in October, progress has resembled swimming through treacle. It has been painfully slow as the trade dispute drags on into a second year amid tit-for-tat tariffs worth a total of nearly $500 billion. A more substantial phase two deal is looking more unlikely by the day.

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“This is a ceasefire, not a deal,” John Edwards, an academic at the Lowy Institute, an independent Australian think tank based in Sydney, said. “The quarrel is causing significant damage to the US and China, and to the entire global economy.

“Since China will not agree to adopt a US view on what structural changes are appropriate for its economy, a phase one deal may well be the only deal possible,” he added.

Last week, President Xi Jinping’s government announced plans to hotwire a stalling economy after announcing a 147.2 billion yuan, or $21 billion, mega-fund to upgrade the manufacturing sector. It will work alongside other crucial investment programs involved in advanced manufacturing and integrated circuits as part of an estimated $110 billion high-tech budget.

“The new fund will invest throughout the entire manufacturing industry value chain,” Zhang Yuzhe, a researcher at the National Development and Reform Commission, which is linked to the powerful State Council, told the Shanghai Securities News.

In the meantime, the industrial sector continues to sing the trade war blues.