China: Imports and Exports collapse in July

A sharp slowdown in July is registered in Chinese imports and exports that fell much more than expected.

China’s imports fell 12.4% in July year-on-year, while exports fell 14.5%. In June, imports were at -6.8% (forecasted -5%), and exports were at -12.4% (forecasted -12.5%).

These numbers reflect weak domestic and external demand, the latter doomed to remain low given that some of the Western economies are far from prospering.

However, figures released by Chinese customs indicate a trade surplus of $80.6 billion for month, which is up from June’s $70.62 billion and better than the expected $70.6 billion.

Thus, the world’s second economy is trying hard to show signs of recovery, and new government stimuli are expected to accelerate growth. Expectations now describe a further contraction in the third quarter of the year, driven by weakening construction, manufacturing, and services sectors and a decline in foreign investment.