Chinese Trade Data Suggest Weak Outlook
China’s exports and imports unexpectedly declined in June, underscoring the severity of the slowdown in the world’s second-biggest economy.
The trade surplus was $27.1 billion for the month, compared with the median analyst estimate of $27.8 billion. Yet, overseas shipments fell 3.1 percent from a year earlier (first decline in 17 months), data from the General Administration of Customs showed in Beijing today, compared with the median estimate of a 3.7 percent gain in a Bloomberg News survey. Imports dropped 0.7 percent, while the median projection was for a 6 percent increase.
The weak trade data pose further downside risks to the June and Q2 growth numbers and help reinforce concern over risks in H2 if officials do not increase public spending:
More form Reuters:
China’s exports fell 3.1 percent in June from a year earlier, the first decline since January 2012, while imports dropped 0.7 percent, severely missing market expectations and reinforcing signs of a economic slowdown in the second quarter.
The downbeat trade data follow the government’s crackdown on the use of fake export shipment documents to close a loophole for short-term money inflows which had exaggerated China’s export performance.
China’s exports to the United States – the country’s biggest export market, fell 5.4 percent in June from a year earlier, while export to the European Unison dropped 8.3 percent, according to the customs.
“The surprisingly weak June exports show China’s economy is facing increasing downward pressure on lacklustre external demand,” said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai
“Exports are facing challenges in the second half of this year. The appreciation of U.S. dollar and the Chinese government’s recent crackdown on speculative trade activities also put pressure on exports.”
China had a trade surplus of $27.1 billion in June, the customs administration said in a news briefing, largely in line with $27.0 billion expected by economists.