|
 Imports also fell heavily from a year earlier, in line with market
forecasts but suggesting domestic demand might be too feeble to
offset the weaker global demand for China's exports.
Economists had forecast exports to fall just 1 percent, after a 2.8
percent uptick in June, but the data on Saturday showed depressed
demand from Europe and the first drop in exports to the United
States, China's biggest market, since March.
Exports to the European Union fell 12.3 percent in July while those
to the United States dropped 1.3 percent. Demand from Japan, another
big trading partner, slid 13 percent.
"A recovery in external demand remains far off and economic growth
will continue to rely on domestic demand, which implies policies
should continue to be relaxed in the second half," wrote Qu Hongbin,
China economist at global bank HSBC.
Imports fell 8.1 percent, according to the data from the General
Administration of Customs. That compared with forecasts for an 8
percent drop, after a 6.1 percent decline in June, though these
falls also reflected weaker commodity prices.
China recorded a trade surplus of $43.03 billion for the month,
below forecasts of $53.25 billion.
The July trade data could further dim hopes for an economic
turnaround in the second half of this year, after a few signs of
stabilization had emerged in June.
China's factory activity suffered its biggest contraction in two
years in July as new orders fell.
On Friday the central bank published a report warning of further
economic weakness, but argued the economy needed a retooled growth
engine, instead of short-term stimulus.
Economists also blame a strong yuan for the export weakness, with
ANZ Research estimating the currency's nominal effective exchange
rate has risen by 13.5 percent since June 2014.
Analysts say Beijing has been keeping its yuan strong to wean its
economy off low-end export manufacturing. A strong yuan policy also
supports domestic buying power, helps Chinese firms to borrow and
invest abroad, and encourages foreign firms and governments to
increase their use of the currency.
[to top of second column] |
"These factors suggest that China's exports will continue to face
strong headwinds," Liu Ligang and Louis Lam said in an ANZ Research
note on Saturday, adding that they doubted Beijing would hit its
trade growth target of 6 percent for this year.
China's weak import figure partly reflects weak commodity prices
paid to trading partners such as Australia, which ships coal and
iron ore to China. Volume imports of most major commodities were
higher than expected, as Chinese industry took advantage of the
lower prices to restock on raw materials.
Coal deliveries in particular rose strongly in July, up 28.1
percent, though commodity analysts said that prospects for the
market remained dim overall.
Stephen Koukoulas, managing director of Australian consultancy
Markets Economics, said the fall in commodity prices was a major
concern for the Australian and New Zealand economies, which both
rely heavily on demand from China.
"Probably the volumes are ok but the prices that are being paid are
hugely lower. We have got a real concern there for the future levels
of the Aussie dollar," Koukoulas said.
(Additional reporting by Winni Zhou; Editing by Mark Bendeich)
[© 2015 Thomson Reuters. All rights
reserved.] Copyright 2015 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
