China trade outlook worsens as exports tumble in June
Unexpected decline in June trade data prompts economists to downgrade growth forecasts, as premier vows to maintain economic stability
China is on track to record one of its weakest quarters of growth since the global financial crisis, despite a fresh pledge from Premier Li Keqiang to ensure economic stability, after official trade data showed the first annual fall in exports in 17 months.
An unexpected 3.1 per cent fall in June exports from a year earlier to 1.09 trillion yuan (HK$1.38 trillion) and a 0.7 per cent fall in imports left in tatters official forecasts of an 8 per cent growth in total trade this year and prompted economists to revise their overall economic growth calls.
"This will not only bring about downside risk to the GDP growth for this year but also place severe pressure on employment," ANZ Bank economists Liu Ligang and Zhou Hao said in a research note.
The mainland's economic growth data for the second quarter is due on Monday, and many analysts believe the annual rate of growth may have slipped to, or below, 7.5 per cent. It last did so in the third quarter of last year, dropping to 7.4 per cent in the worst three months of growth since the 2009 financial crisis.
The gloomy assessment of private sector analysts came as Li vowed to keep economic growth "within a reasonable range" and not let the "growth rate and employment slide below a bottom line and the rise in consumer prices exceed an upper limit".
Li made the remarks at a meeting on Tuesday with provincial leaders from Guangdong, Hunan and Shaanxi, at which he vowed to prevent "large fluctuations" in the economy.