China's exports, imports decline amid falling global demand
China's exports and imports declined by about three percent in the first seven months amid falling global and domestic demand, according to data released by a ministry-level administrative agency here.
Beijing: China's exports and imports declined by about three percent in the first seven months amid falling global and domestic demand, according to data released by a ministry-level administrative agency here.
Foreign trade in the first seven months was three percent lower than a year before, with exports down 1.6 percent and imports down 4.8 percent,? figures released by General Administration of Customs (GAC) said.
Also exports and imports fell more than expected in July in view of persisting weakness in global demand following Brexit and other factors.
Exports fell by 4.4 percent compared to a year earlier, which was a slight improvement over June's 4.8 percent drop but still lower than analysts had been expecting.
Also imports fell 12.5 percent from a year earlier, the biggest decline since February this year pointing to falling domestic demand despite a host of measures initiated by the government to halt the slowdown of the economy.
State-run Xinhua news agency, however, said exports in yuan-denominated terms rose 2.9 percent year on year in July, while imports fell 5.7 percent.
Yuan has declined by more than six percent in the last several months after the first devaluation in September last year.
In US dollar denominated terms, exports fell to USD 184.7 billion while imports dropped to USD 132 billion. This leaves the country with a trade surplus of USD 52.31 billion for the month of July.
A 6-percent depreciation of the yuan against a basket of currencies over the past year has boosted exports to some extent, but there is still significant uncertainty about external demand, Xinhua quoted? China International Capital Corporation (CICC) analyst Liu Liu as saying.
Export growth may stay low in the second half of the year, Liu said.
The accelerating fall in imports came amid weak commodity prices and higher comparative base from last year, but it also suggested domestic economic activity remained weak, said Jiang Chao, an analyst with Haitong Securities.
Jiang expected the exchange rate of the yuan to remain stable in short term.
The figures do "not bode well for the state of global demand, given that Chinese exports benefited from a weaker currency," Louis Kuijs of Oxford Economics was quoted as saying by BBC.
"Looking forward, we expect the trade data to remain lackluster in the coming months, given our outlook of subdued momentum in global trade and China's domestic demand," Kuijs said.
The sluggish domestic demand indicates that China's efforts to boost consumption to spur growth have yet to take effect.
China's economy grew 6.7 percent year on year in Q2, aided by infrastructure investment, a housing boom and bank lending.
The growth rate is the country's slowest quarterly growth since the first quarter of 2009.
China's GDP slowed down to 6.9 percent last year.
The government has fixed this year's target between 6.5 percent to seven percent.
Today's data showed that trade with the European Union, China's biggest trade partner, climbed 1.8 percent year on year in the first seven months, GAC data showed.
In the same period, foreign trade with the United States, China's second-biggest trade partner, fell 4.8 percent and that with the ASEAN, its third-largest trade partner, declined 2.2 percent, Xinhua reported.
Meanwhile, global ratings agency Fitch said in a report on the outlook for China's volatile real estate sector that housing demand in China will remain relatively resilient up to 2030 while short-term market volatility will persist.
China needs to build 800 million square meters of residential property space - about the size of Singapore - every year between 2016 and 2030 to meet demand, the Fitch report said.
During this period, new housing supply is predicted to average around 750 million square meters per year, down 25 percent from the agency's previous estimates, while new home sales are seen to track similar levels.
Though the volume of new homes to be sold and completed in the country will fall, the magnitude of the decline is likely to be modest on an annualised basis, the report said.
China's housing market had cooled for more than a year before starting to recover in the second half of 2015, boosted by government support, which included interest rate cuts and lower deposit requirements.
The sector's recovery, however, has been uneven from city to city, with economically-strong areas reporting drastic price rises, and less developed areas still reporting huge inventories of unsold houses.