Chinese exports sank for a seventh consecutive month in October, as weak global demand dealt a blow to the world's number two economy following recent signs of stability. 

The result, which also missed forecasts, comes as the country's export-oriented companies see their margins squeezed by rising labour costs and increasing competition from southeastern Asian countries. 

Overseas shipments fell 7.3% year-on-year, while imports also fell 1.4%, with both coming in below expectations in a survey of economists by Bloomberg News. 

China is the world's biggest trader in goods and its performance affects partners from Australia to Zambia, which have been battered as its expansion has slowed to levels not seen in a quarter of a century. 

With exports totalling $178.2 billion and imports $129.1 billion the trade surplus dropped to $49.1 billion in the month. 

Customs earlier gave the figure in yuan terms, showing a 3.2% drop in exports and a 3.2% increase in imports on-year. 

Analysts said the outlook appeared challenging with "global and domestic growth unlikely to accelerate much further". They said that the current pace of global growth is likely to be as good as it gets for the foreseeable future.

Though the yuan currency's value has slid to a series of six-year lows against the dollar in recent weeks, making Chinese goods cheaper for trade partners, it has not been enough to lift exports into positive territory.

The yuan weakened further today after the People's Bank of China said the country's foreign exchange reserves dropped nearly $46 billion in October, their second-largest decline this year as capital outflows eat into the world's largest stockpile.

While today's trade figures disappointed, analysts said they suggested that external demand had "not worsened significantly" despite earlier data on factory activity that pointed to a larger decline. 

Beijing is seeking to transition the economy away from being the world's factory floor for cheap goods to supplying the country's growing consumer needs. 

Authorities have set a growth target of 6.5-7% for the year, which they are on track to meet thanks to loose credit, a booming property sector, and fiscal stimulus spending on infrastructure.

Chinese government figures last month showed growth was steady at 6.7% in the third quarter, a sign of stabilisation after years of slowing.