BEIJING, July 10 (Xinhua) -- China's exports and imports took surprising tumbles in June, putting pressure on growth of the world's second-largest economy.
Exports dropped 3.1 percent year on year last month to 174.32 billion U.S. dollars, while imports went down 0.7 percent from a year earlier to 147.19 billion U.S. dollars, the General Administration of Customs (GAC) said on Wednesday.
The exports growth rate was far below market expectation of 3.7 percent and imports missed the market estimate of 6 percent, said Liu Ligang, chief greater China economist at ANZ Banking Group.
Exports in May went up 1 percent year on year, while imports dipped 0.3 percent.
Sluggish exports indicate the economy was under downward pressure, but the figures have also been influenced by the government's fight against inflowing speculative money, Liu said.
Total foreign trade in June shrank 2 percent year on year to 321.51 billion U.S. dollars.
GAC spokesman Zheng Yuesheng attributed the slumps mainly to weak global demand, a rising yuan, higher labor costs, various trade frictions and faltering domestic demand.
Zheng said that China's foreign trade growth rate has been on a downward trend in the first half year. It grew 13.5 percent in the first quarter year on year and 4.3 percent in the second quarter, but just 0.3 percent in May and now a 2 percent fall in June.
Monthly figures also indicated that foreign trade activities are slowing down, said Zheng. June's total foreign trade fell 6.8 percent from May, with exports down 4.6 percent and imports dropping 9.3 percent from May, he said.
Despite the sluggish June data, Zheng said China's foreign trade in the first half year performed the best among the world major economies despite the fact that it is slowing down.
China's foreign trade neared 2 trillion U.S. dollars in the first half year, up 8.6 percent year on year, with exports at 1.05 trillion U.S. dollars, up 10.4 percent, and imports at 944.87 billion U.S. dollars, up 6.7 percent.
He said the United States, Japan, the Republic of Korea and Russia have all seen foreign trade shrink from a year earlier in the first five months, while the European Union saw trade up only 0.3 percent in the first four months compared with the same period in 2012.
The lackluster figures in China's major trade partners also signalled that global demand remained weak and will further weigh on the country's exports, Zheng said.
The fast rising yuan has cut the competitive edge of Chinese enterprises, said Wang Jun, an economist with the China Center for International Economic Exchanges.
A recent survey by the Ministry of Commerce showed that 85.5 percent of enterprises hoped that the yuan exchange rate will stay relatively stable, Wang said.
Wang Jinyou, chairman of Zhucheng Foreign Trade Co. Ltd., said the sharp depreciation of the Japanese yen will take effect soon as their Japanese clients demanded a 3 to 5 percent price cut in new orders. The company is a leading chicken exporter in China with Japan as its key buyer.
The mainland's exports to Hong Kong has been slumping dramatically. There was 92-percent month-on-month growth in March, followed by 57 percent month-on-month expansion in April, a 7.7 percent month-on-month increase in May, and a 7-percent month-on-month decrease in June.
The slump is a result of the government's measures to crack down on fake exports, mainly through over invoicing on trade to Hong Kong, according to a report from the Bank of Communications.
Zheng said China's foreign trade faces a complicated situation with difficulties and challenges ahead, urging for more efforts on trade restructuring to sustain market share in global trade.
The country's economic growth eased to 7.8 percent last year, the slowest since 1999. It further slowed to 7.7 percent in the first quarter of 2013.
Economic data for the second quarter is due on July 15. Economists have forecast growth at 7.5 percent, close to the government's target for the year.
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