Business conditions during a trade war and PBOC tightening is not for the faint of heart. As seen on the Cheung Kong Business Conditions Index in the figure below some key takeaways standout. Overall, BCI dropped from 49.81 to 41.88. Businesses are not comfortable with the current conditions presenting their respective markets. Only three sectors increased, all other sectors measured decreased. Labor costs and overall costs increased just over a point each. Industry comparison gained 3 points. A key sector that decreased is profits; it dropped MoM from 60.43 to 43.03. We believe increased financing pressure is affecting profits. We believe this correlates to downward pressures degrading business conditions.