Chinese trade drop adds to global economic woes

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AFP

Chinese exports have seen a further decline in July, adding to concerns over the global economic outlook.

Exports fell by 4.4% compared to a year earlier, which was a slight improvement over June’s 4.8% drop but still worse than analysts had been expecting.

Imports were also weaker than estimated, down by 12.5%.

As China is a crucial driver of the worldwide economy, the data is seen as a snapshot of the global outlook.

The country’s exports have fallen for 12 out of the past 13 months.

Global uncertainty ranging from low commodity prices to the EU debt crisis and the UK leaving the bloc continues to mute economic activity around the world.

‘Lacklustre’

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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 wrote in a note.

“Looking forward, we expect the trade data to remain lacklustre in the coming months, given our outlook of subdued momentum in global trade and China’s domestic demand.”

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World markets wanting more or less of these is seen as a key to the global outlook

In US dollar denominated terms, exports fell to $184.7bn (£141bn) while imports dropped to $132.4bn.

This leaves the country with a trade surplus of $52.31bn for the month of July.

The sluggish domestic demand indicates that Beijing’s efforts to boost consumption to spur growth have yet to take effect.

The fresh data, though, comes on the heels of better-than-expected economic growth in the second quarter.

Gross domestic product expanded by 6.7% in the three months to June compared to a year earlier, China’s statistics bureau said last month.

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