Chinese trade falls in June in new sign economy fadingWednesday 10 July 2013 17.33
China's trade declined abruptly in June in a sign growth in the world's second-largest economy might be cooling even more sharply than expected.
Exports fell by 3.1% compared with a year earlier and imports contracted by 0.7%, customs data showed today. Both were below forecasts of growth in the low single digits.
China's economic growth has slowed this year and is expected to fall further due to weak global demand and an effort by the Chinese central bank to cool a credit boom.
The country's new leaders, who took power last year, say they want to pursue slower, more self-sustaining growth based on domestic consumption, reducing reliance on trade and investment.
But some analysts say the latest slowdown might be so deep they could be forced to temporarily reverse course and boost lending or government spending to stimulate growth.
A decline in Chinese economic activity could have global repercussions, denting revenues for suppliers of commodities and industrial components such as Australia, Brazil and Southeast Asia. Lower Chinese demand already has depressed global prices for iron ore, copper and other raw materials, cooling an economic boom for exporters.
The ruling party's growth target this year is 7.5%, down by almost half from 2007's staggering growth rate of 14.2%. Some analysts have suggested growth might dip below 7% in coming months - dangerously low by Chinese standards.
Some private sector forecasters cut their growth outlook for the year, though to still robust levels above 7%, after a credit crunch hit China's financial markets last month. That came as the central bank tried to rein in a lending boom regulators worry could spiral out of control.
Chinese leaders have promised to promote private businesses that generate most of China's new jobs and wealth but have yet to make major changes.
Retail sales have fallen short of official forecasts and a HSBC survey of manufacturers showed activity contracted in June for a second month.
But Chinese leaders are unlikely to back away from efforts to overhaul the country's growth model, analysts said. They expect China to report slower growth in trade due to a crackdown on misreporting of data by exporters as a way to evade currency controls and bring extra money into the country.
But even with that taken into account, today's figures were below forecasts for exports to rise by up to 3.5% and imports to grow by up to 1.5%.
June's export growth was down from May's year-on-year gain of 13.5% and import growth was down from 8.2%.
China's politically sensitive global trade surplus contracted by 12.4% compared with a year earlier to $27.1 billion.
Exports were $174.3 billion while imports were $147.2 billion.
Growth in exports to the US, China's biggest foreign market, fell to 1.8% from May's rate of 3.5%. Exports to the 27-nation European Union contracted 3.9%.