BEIJING”•China’s economy, the world’s second largest, struggled in July with a worse-than-expected trade performance as imports plunged 12.5 percent year-on-year, Customs said Monday.
Imports fell to $132.4 billion, customs data showed, as weaker global commodity prices and lackluster domestic demand weighed on purchases.
The drop in imports was significantly larger than expectations for a 7.0 percent fall, the median forecast in a survey of economists by Bloomberg News.
Exports also fell in US dollar terms, dropping 4.4 percent to $184.7 billion”•below expectations of a 3.5 percent decline.
As the world’s biggest trader in goods, China is crucial to the global economy and its performance affects partners from Australia to Zambia, which have been battered by its slowing growth”•while it faces headwinds itself in key developed markets.
Analysts described the July trade performance as disappointing.
“Signs of stronger manufacturing activity among many of China’s key trading partners has so far failed to lift export growth,” China economist for Capital Economics, Julian Evans-Pritchard, said in a research note.
“At the same time, the renewed fall in global commodity prices is dragging down import growth,” he said.
July was the fourth month in a row that exports declined in dollar terms.
China’s imports have been shrinking since late 2014 with global commodity prices hammered as the country’s once blistering expansion lost steam, slowed down by manufacturing overcapacity, a slowing property market and mounting debt.
July saw their biggest monthly fall since February, when they lost 13.8 percent.
“China’s trade data was unimpressive in July,” ANZ Banking Group said in a research note, which added the outlook for the second half of the year was “challenging.”