China’s June exports, imports fall as trade war takes heavier toll

BEIJING: China’s exports fell in June as the United States ramped up trade pressure, while imports shrank more than expected, pointing to further weakness in the world’s second-largest economy and slackening global growth.
The gloomy trade readings added to a string of recent downbeat economic data which have fuelled expectations that Beijing needs to announce more stimulus measures soon to ward off a sharper slowdown.
China is expected to report on Monday that growth in the second quarter was the weakest in at least 27 years.
Other data released on Friday showed new bank loans rose to a three-month high in June as policymakers sought to keep ample funds in the financial system, though the tally was less than analysts had expected.
“Overall, imports and exports are declining quarter by quarter, and weak foreign demand will be the biggest challenge in the second half of this year,” said Zhang Yi, chief economist at Zhonghai Shengrong Capital Management in Beijing.
“Short-term policy stimulus should be brought forward.”
China’s manufacturers are struggling with sluggish demand at home and abroad, and a sharp US tariff hike announced in May threatens to crush already-thin profit margins. An official June survey showed factories were shedding jobs at the fastest pace since the global crisis, a major worry for Beijing.
June exports fell 1.3 per cent from a year earlier, not as much as the 2 per cent drop analysts had expected but reversing a surprise gain in May when shippers rushed to beat more US tariffs, customs data showed.
Imports fell 7.3 per cent, a sharper drop than the 4.5 per cent expected and following a 8.5 per cent contraction in May, suggesting domestic demand remains tepid despite a flurry of growth measures since last year.
That left China with a trade surplus of $50.98 billion last month, compared with a $41.66 billion surplus in May.
Highlighting industrial weakness, China’s imports of copper, used in electrical gear from wiring to motors, plunged 27 per cent from a year earlier.
— Reuters