China import, export falls accelerate in June
AFP
AFP, BEIJING: Chinas imports and exports both fell at a faster rate in June, official data showed yesterday, in the latest poor indicator for the worlds second-largest economy.
Imports dropped 8.4 per cent year-on-year in dollar terms in June, Customs said, while exports fell 4.8 per cent . The monthly trade surplus jumped to $48.1 billion.
As the worlds biggest trader in goods China is crucial to the global economy and its performance affects partners from Australia to Zambia, which have been battered by its slowing growthwhile it faces headwinds itself in key developed markets.
Its imports have been shrinking since late 2014 as the countrys once blistering expansion lost steam, slowed down by manufacturing overcapacity, a slowing property market and mounting debt.
Junes declinethe 20th straight month of fallscame after a surprise rebound in May that suggested demand was strengthening.
The fall was greater than analysts expected, with a Bloomberg poll of economists forecasting an import drop of 6.2 per cent in dollar terms.
Exports were marginally ahead of an expected 5.0 per cent fall.
Customs attributed the lower imports to weakening commodity prices.
The input volume of major bulk commodities such as iron ore, crude oil and copper maintained growth, it said in a statement. The prices of major import commodities remained low with a narrowing price decline.
China imports and exports both fell in the first half of the year, by 10.2 per cent and 7.7 per cent respectively.
Customs said there were obvious obstacles blocking Chinas foreign trade development, particularly the decline in business in both directions with major trading partners such as the US and ASEAN.
Analysts with SG Global Economists said in a report before the results that export strengthening was due to a recovery in the electronics sector, despite lacklustre overseas demand.
A falling yuan currency in recent weeks could give further support to Chinas manufacturing against foreign competitors.
But uncertainties over Britains exit from the European Union, expected US interest rate hikes, terrorist threats, and weak global demand weighed on trade prospects, Customs spokesman Huang Songping told reporters.
Exports faced large downward pressures in the third quarter, he said.
The domestic economy has been operating steadily but downward pressures have continued to increase. Companies costs have remained high and some industries and orders have been shifted abroad.
Customs first released the data in yuan terms, which showed a slight 1.3 per cent rise in June exports and a 2.3 per cent drop in imports.
The lack of demand will constrain authorities to retain an easing bias in domestic policy, Bloomberg Intelligence economists Tom Orlik and Fielding Chen said in a note reported by Bloomberg News.
Yuan weakness has bolstered competitiveness and prevented a sharper slide in overseas sales, they added.
But analysts with ANZ Research said they did not expect the central bank to push the currency lower in a competitive devaluation because authorities were more willing to allow the yuan to be dictated by market forces.
The prospects for Chinas export sector are relatively bleak, Yue Su, China economist for The Economist Intelligence Unit said, due to uncertainty in the European Union, Chinas largest export market, and an anticipated further drop in US demand due to rising interest rates.
