BEIJING • China's exports and imports grew more slowly than expected last month, raising concerns over whether global demand is starting to cool even as major Western central banks consider scaling back their massive stimulus programmes.
China's export growth slowed to 7.2 per cent in July from a year earlier, the weakest pace since February and cooling from an 11.3 per cent rise in June, official data showed yesterday. Imports rose 11 per cent, the slowest growth since December and down from a 17.2 per cent rise in the previous month.
That left the country with a trade surplus of US$46.74 billion (S$63.6 billion) for the month, the highest since January, compared with June's US$42.77 billion.
"Exports slowed in July, a reminder that despite robust demand, the world's factory has limited scope to grab increased market share," Bloomberg Intelligence economists Tom Orlik and Fielding Chen wrote in a report.
Get The Straits Times
newsletters in your inbox
"If exports now come off the boil, that would provide additional reason for caution on deleveraging."
Improving global demand has boosted exports for China and other trade-reliant Asian economies in recent months after several lean years of declining shipments, but investors have been more focused on strong Chinese appetite for imports, particularly for industrial commodities such as iron ore and coal, which has sparked a global price rally for these commodities.
Demand for Chinese products has remained resilient as growth in major trading partners continues to recover. At home, stronger- than-expected output is supporting robust import demand.
Yet the world's largest exporter confronts more uncertainty as US President Donald Trump continues sporadic tough talk on trade. The White House may be considering a probe into alleged intellectual property violations, which could risk igniting trade tensions.
China's trade surplus with the United States, its largest export market, rose 5.9 per cent in the first seven months of this year to US$142.75 billion, compared with the same period a year ago, even as China's overall trade surplus has declined this year.
China's surplus with the US was US$25.2 billion last month, nearly unchanged from June's US$25.4 billion, which was the highest since October 2015.
Asian stock markets went flat after the disappointing China data, which came a day after ratings agency Fitch upgraded its outlook for the world economy for this year and next, citing recoveries in China and other emerging markets.
"Despite an uptick at the end of the second quarter, (China's) trade growth now appears to be on a downward trend. In particular, the sharp decline in import growth since the start of the year suggests that domestic demand is softening," Capital Economics said in a note.