China’s trade declined abruptly in June, an apparent sign that growth in the world’s second largest economy might be cooling even more sharply than expected.
Exports fell by 3.1 percent compared with a year earlier, and imports contracted by 0.7 percent, customs data showed on Wednesday.
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 leaders claim that they want to pursue slower, more self-sustaining growth based on domestic consumption, reducing reliance on trade and investment.
According to Zheng Yuesheng, spokesman for China’s General Administration of Customs, what is affecting growth in exports is the decrease in demand from external markets.
“Export growth is at a low point. Among the nearly two thousand exporting companies that we surveyed this year, more than 40 percent of the companies reported that the number of new orders has been decreasing compared to the same period last year. According to the survey conducted at the end of June, 69.2 percent of companies have reported that the number of new orders has decreased compared to the same period last year.”
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.
Some private sector forecasters cut their growth outlook for the year, though to still robust levels above 7 percent, 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.
Analysts expected 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, Wednesday’s figures were below forecasts for exports to rise by up to 3.5 percent and imports to grow by up to 1.5 percent.
June’s export growth was down from May’s year-on-year gain of 13.5 percent and import growth was down from 8.2 percent.
China’s politically sensitive global trade surplus contracted by 12.4 percent compared with a year earlier to 27.1 billion US Dollars. Exports were 174.3 billion US Dollars while imports were 147.2 billion US Dollars.
Growth in exports to the United States, China’s biggest foreign market, fell to 1.8 percent from May’s 3.5 percent. Exports to the 27-nation European Union contracted 3.9 percent.
The trade surplus with the U.S. contracted by 15.5 percent from a year earlier to 17.5 billion US Dollars, but still one of this year’s highest levels. The surplus with Europe shrank 20.3 percent to 10.2 billion US Dollars.
(Copyright 2013 APTN. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)