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China’s industrial profits declined again in July, but at a significantly slower pace compared to earlier months, indicating the impact of Beijing’s measures against price wars.

According to National Bureau of Statistics data, the profit fell 1.5% in July compared to the same period a year earlier. This compares to a 4.3% fall in June and a 9.1% slip in May.

Till July, the total profits of industrial enterprises fell 1.7%, compared with the first seven months of last year. The declines were led by the mining industry, which logged a year-over-year decrease of 31.6%, primarily due to a plunge in coal earnings amid concerns about oversupply, and strong growth in renewable energy capacity.

The country’s manufacturing industry grew by 4.8% over the same period, led by a 11.7% increase in the electrical machinery and equipment manufacturing industry.

The figures released on Wednesday suggest that China’s efforts to combat unsustainable price levels may be having an impact. Beijing launched a multi-pronged so-called “anti-involution” campaign in July to end the deflationary price wars after realizing that industrial overcapacity might stunt growth amid trade uncertainty.

According to a Reuters News report, China’s program aims to channel investment funds into advanced manufacturing, control production in highly competitive industries such as steel, oversee pricing and subsidies in electric vehicles, and food delivery.

Retail sentiment on Stocktwits about iShares China Large-Cap ETF (FXI) was in the ‘extremely bullish’ territory at the time of writing.

However, Beijing will likely need to wait longer before declaring victory over the price wars. China’s factory activity in July slowed to the lowest since April despite the easing of U.S. tariffs amid signs of weakness in exports and tepid domestic consumption.

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