Chinese export, import growth rates slow in July

BEIJING: Chinese trade growth slowed significantly in July compared to the previous month, official data showed yesterday, coming in well below expectations after months of steady momentum.

Analysts said that while export and import rates were still robust year-on-year, the latest data indicated a downward trend.

Exports increased 7.2% year-on-year to US$193.65 billion (RM828.8 billion), the Customs administration said, undershooting a Bloomberg News forecast of 11%.

Imports were up 11% year-on-year – compared with an expected increase of 18% – to US$146.9 billion, lifting the trade surplus to US$46.74 billion.

“Despite the uptick at the end of (the second quarter), trade growth now appears to be on a downward trend,” said Julian Evans-Pritchard, a China economist at Capital Economics.

“In particular, the sharp decline in import growth since the start of the year suggests that domestic demand is softening.”

The trade figures come despite positive recent economic data, including better-thanexpected second-quarter GDP growth of 6.9%.

China has been trying to curb capital flight and risky bank lending, putting restrictions on property purchases as the country’s mounting debt fuels fears of a looming financial crisis.

Regulators are now focused on reining in “grey rhinos” – a term broadly referring to risky financial practices that have long been visible but ignored.

The term in China applies to several large quasi-private companies such as Wanda, Anbang, and Fosun that have used cheap debt from state-owned banks to fuel aggressive expansion at home and abroad but whose wings are now being clipped by Beijing.

The July import and export data follows the passing on Saturday of a UN Security Council Resolution that significantly strengthened sanctions on North Korea by banning its exports of coal, iron, and other key hard-currency earners.

China is North Korea’s most important trading partner. – AFP