Given COVID disturbances in August, subdued macroeconomic data is no surprise. However, it is increasing regulatory tightening and raw material prices, in addition to COVID, that is dragging on industrial production, heretofore the major driver of China’s current economic recovery. In particular, pressing 2021 targets to reduce energy consumption and to contain carbon emissions, together with coal shortages due to trade and COVID disruptions to coal supply, have led to massive power cuts and production suspensions in the industrial sector. A tight supply of coal, coal power production, and the impact on upstream metal products, are impacting the manufacturing sector. In parallel, strict financing restrictions aimed at real estate development have not only drastically slowed new home sales in the past two months, but also raised significant liquidity risks for the largest property developers, most prominently, Evergrande.