BEIJING: China’s foreign trade volume continued to drop in the first half (H1) of the year, but an unexpectedly strong exports rebound in June was an encouraging sign for the pressured economy, official data showed on Monday.
Total foreign trade dropped 6.9 percent year on year to 11.53 trillion yuan (1.89 trillion U.S. dollars) in the first six months of 2015, slipping further from a 6-percent decline in the first quarter, according to data from the General Administration of Customs (GAC).
Exports rose slightly by 0.9 percent from a year ago, but imports slumped 15.5 percent, weighed down by a gloomy global climate and feeble domestic demand.
The trade surplus expanded 1.5 times to 1.61 trillion yuan, data showed.
GAC spokesperson Huang Songping described the situation as “grim and complicated” under the sluggish global economy during a press conference.
Huang attributed the import decline to shrinking domestic demand hurt by unsolved industrial overcapacity as well as falling commodity prices in the global market.
“Cheaper commodities dragged down China’s import growth by 10.4 percentage points,” Huang said. The crude oil price has slumped around 50 percent and iron ore has dropped over 40 percent from last July.
Despite an economic slowdown, China maintained a strong appetite for commodities. In H1, its crude imports gained 7.5 percent year on year to 163 million tonnes, and soybean imports climbed 2.8 percent to 35.16 million tonnes.
Exports were less troubling due to mild growth but were still plagued by anemic external demand.
The world is still trying to drag itself from the mire of the financial crisis with depressed trade and lowered demand in both developed and emerging economies, Huang said.
Exports were also curbed by rising salaries of Chinese workers and the appreciation of the yuan, Huang said.
The official exchange rate of the yuan against the U.S. dollar, the euro and the yen strengthened by 0.2 percent, 6.9 percent and 2.2 percent respectively during the past 6 months.
Liu Liu, macro researcher with CICC, said the significant appreciation will put some pressure on the recovery in exports and expected export growth to remain low in the short term.
Although China was still far from breaking its downward spiral in foreign trade, there were some encouraging signs in June.
Exports rose 2.1 percent from a year earlier, ending a three-month losing streak, and the decline in imports narrowed to 6.7 percent from an 18.1-percent slump.
The trade surplus jumped by 45 percent to 284.2 billion yuan, the GAC data showed.
Given improvement in June, Huang expects China’s foreign trade to perform better in the second half thanks to supportive efforts by the government.
