China’s imports tumble in August as global demand slides
Finance Ministry says it will step up fiscal efforts to ease pressures on China's eonomy as Beijing attempts to avoid hard landing
China's imports tumbled in August, raising concerns about the health of the world's second-largest economy and its contribution to global growth.
The data will add to the pressure on Beijing policymakers trying to ensure the economy avoids a hard landing.
Imports were down 13.8 per cent from a year earlier, far more than analysts had forecast and a tenth consecutive monthly drop, reflecting both lower global commodity prices and sluggish demand.
A surprise devaluation in the yuan early last month combined with slowing consumer demand will dent the prospects of a major pick-up in imports any time soon.
In a separate development, the Ministry of Finance said on Tuesday night that it would "step up" its fiscal measures to offset downward pressures on the economy.
Those measures included expediting major infrastructure projects through consolidation of government funds, the ministry said.
It would also expand tax breaks to small firms with annual taxable revenue below 300,000 yuan (HK$364,000), up from the original 200,000 yuan threshold, it said.
The ministry will also approve more duty-free shops at border ports to encourage domestic consumption.
Much of the country's imports are commodities and other raw materials going into factories that turn them into goods for sale overseas, so the fall could be an ominous sign for exports in the coming months.
Exports fell less than forecast, down by 5.5 per cent, but analysts were still doubtful that China could achieve its year-end trade growth target of 6 per cent.
"The yuan devaluation will have limited impact on exports, which are falling because demand is weak, not because the price is not good," said Li Jian, head of foreign trade research at the Chinese Academy of International Trade and Economic Cooperation, the Commerce Ministry's think tank.
Bank of Communications analyst Liu Xuezhi said: "China is set to miss its [2015] export growth target and there will be no help from the external demand side for economic growth."
Two-way trade fell by 9.1 per cent overall in August, measured in US dollar terms, General Administration of Customs said. "Exports to the US and the Association of Southeast Asian Nations continued to grow but shipments to the EU and Japan declined," it said.
Analysts said last month's deadly chemical blasts in Tianjin affected shipments.
The explosions on August 12, which killed 161 people, had weighed on shipments, but the impact might be short-lived, analysts at Goldman Sachs, wrote in a report published before the data release.
The Organisation for Economic Cooperation and Development said China's economy was losing steam and other big emerging-market economies such as Brazil and Russia were also showing signs of weakness.
"The outlook continues to deteriorate for China, with the CLI [leading indicators] pointing more strongly to a loss of growth momentum," it said.
