China’s imports, exports fall again in July

BEIJING – China’s exports fell again in July by an unexpectedly wide margin while a decline in imports accelerated in a possible sign of weakness in the world’s second-largest economy.

Exports contracted 4.4 per cent to $184.7 billion, a slight improvement over June’s 4.8 per cent contraction, customs data showed Monday. Imports fell 12.5 per cent to $132.4 billion, accelerating from a decline of 8.4 per cent.

Weak global demand has hampered efforts to shore up Chinese trade and stave off job losses in export industries. The contraction in imports reflects possible weakness in the domestic economy, but the figures also are depressed by a decline in prices of oil and other commodities.

Chinese economic growth held steady at 6.7 per cent in the quarter ending in June compared with a year earlier, though that was the lowest quarterly level since the aftermath of the 2008 global crisis.

The declines in both exports and imports were worse than many forecasters expected.

“The data dash hopes that a pick-up in global manufacturing growth last month might have buoyed shipments from China,” said Julian Evans-Pritchard of Capital Economics in a report.

“The country’s export growth is likely to remain subdued for some time,” said Evans-Pritchard. “While we think the worst is probably over for many emerging markets, global growth is likely to remain lacklustre well into next year.”

The slump in imports meant China’s global trade surplus swelled by 22 per cent from the same month a year ago to $52.3 billion.

China’s trade surplus with the European Union, its biggest trading partner, was $11.8 billion. The surplus with the United States was $24.7 billion.

Even taking lower prices into account, the Chinese figures suggest imports fell by 5.3 per cent, according to Louis Kuijs of Oxford Economics.

“It implies that volumes dropped substantially month on month,” said Kuijs in a report. “It may herald that domestic demand started to slow down in July.”