Overseas shipments fell 3.1 percent from a year earlier, the most since the global financial crisis, data from the General Administration of Customs showed in Beijing today. Imports dropped 0.7 percent, while the median projection was for a 6 percent increase.
Exports to the U.S. and European Union declined for a fourth straight month while the drop in imports resulted in part from falling commodity prices. Weaker global and domestic demand, highlighted by China’s biggest shipyard outside state control seeking a government bailout, increases pressure on Li to support growth that’s at risk of sliding to the weakest since 1990 even as he vows to press on with restructuring the economy.
“Following on the subdued activity data of recent months, the June trade data challenges the resolve of China’s policy makers to keep the macro policy stance firm,” said Louis Kuijs, chief China economist at Royal Bank of Scotland Plc in Hong Kong.
The trade surplus was $27.1 billion for the month, compared with the median analyst estimate of $27.8 billion. Exports rose 1 percent in May from a year earlier, while imports fell 0.3 percent.
The report follows May’s collapse in export gains after a crackdown on fake invoices that inflated data in the first four months of the year. Trade growth in danger of coming in below the government’s target of 8 percent for the year and a cash crunch that sent interbank borrowing costs to records last month will test Li’s reluctance to add stimulus, with expansion at risk of coming in below the government’s annual goal of 7.5 percent.
One reason for the weak trade figures might be that the customs agency “had to deflate trade data in June to neutralize previous over-reporting,” economists Zhi Xiaojia and Lu Ting in Hong Kong said in a report. Appreciation in the yuan this year may also be making Chinese exports less competitive, they said.
Source : Asia News | July 10, 2013