Worsening imports drop in July points to weak China demand

China's exports fell again in July by an unexpectedly wide margin while a decline in imports accelerated in a possible sign of weakness in the world's second-largest economy. 
Exports contracted by 4.4 percent to US$184.7 billion, a slight improvement over June's 4.8 percent contraction, customs data showed today. Imports fell by 12.5 percent to US$132.4 billion, accelerating from a decline of 8.4 percent. 
(Pictured, China trade week in Nairobi, Kenya on June 29). 
Weak global demand has hampered efforts to shore up Chinese trade and stave off job losses in export industries. The contraction in imports reflects possible weakness in the domestic economy, but the figures also are depressed by a decline in prices of oil and other commodities. 
China's economic growth held steady at 6.7 percent in the quarter ending in June compared with a year earlier, though that was the lowest quarterly level since the aftermath of the 2008 global crisis. 
The declines in both exports and imports were worse than many forecasters expected. 
"The data dash hopes that a pick-up in global manufacturing growth last month might have buoyed shipments from China,'' said Julian Evans-Pritchard of Capital Economics in a report. "The country's export growth is likely to remain subdued for some time. While we think the worst is probably over for many emerging markets, global growth is likely to remain lackluster well into next year.'' 
The slump in imports meant China's global trade surplus swelled by 22 percent from the same month a year ago to US$52.3 billion. 
China's trade surplus with the European Union, its biggest trading partner, was US$11.8 billion. The surplus with the United States was US$24.7 billion. 
Even taking lower prices into account, the Chinese figures suggest imports fell by 5.3 percent, according to Louis Kuijs of Oxford Economics. "It implies that volumes dropped substantially month on month,'' said Kuijs in a report. "It may herald that domestic demand started to slow down in July.''-AP