BEIJING China’s exports fell more than expected in June as global demand remained stubbornly weak and as Britain’s decision to leave the European Union clouds the outlook for one of Beijing’s biggest markets.
Imports also shrank more than forecast, indicating the impact of measures to stimulate growth in the world’s second-largest economy may be fading, after encouraging import readings in May.
Exports fell 4.8 percent from a year earlier, the General Administration of Customs said on Wednesday, adding that China’s economy faces increasing downward pressure and the trade situation will be severe this year.
Imports dropped 8.4 percent from a year earlier.
That resulted in a trade surplus of $48.11 billion in June, versus forecasts of $46.64 billion and May’s $49.98 billion.
Economists polled by Reuters had expected June exports to fall 4.1 percent, matching May’s decline, and expected imports to fall 5 percent, following May’s 0.4 percent dip.
The marginal import decline in May was the smallest since late 2014, and had raised hopes that China’s domestic demand was picking up.
“The world economy still faces many uncertainties. For example, Brexit, expectations of an interest rate hike by the Federal Reserve, volatile international financial markets, the geopolitical situation, the threat of terrorism … these will affect the confidence of consumers and investors globally and curb international trade,” customs spokesman Huang Songping told a news conference.
“We believe China’s trade situation remains grim and complex this year. The downward pressure is still relatively big.”
Exports to the United States – the country’s top export market – fell 9.9 percent in the first half year-on-year, while shipments to the European Union – its second biggest market – fell 4.4 percent.
Fresh weakness in the yuan currency appears to have done little so far to help China’s struggling exporters.
The yuan CNY=CFXS fell about 3 percent versus the dollar and 5.86 percent against a broader basket in the second quarter, though Chinese officials have said repeatedly they will not purposely devalue the currency to boost exports.
(Reporting by Elias Glenn- Editing by Kim Coghill)
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