Mainland exports shrank at a worse than expected 23.4 per cent last month, highlighting the need for a stronger push on domestic consumption to propel growth.
Overseas shipments fell for the 10th consecutive month to US$103.7 billion, steeper than the 23 per cent decline in July and economists' consensus of a 19 per cent drop. Imports contracted 17 per cent to US$88 billion, more than the 14.9 per cent decrease in July, according to the Administration of Customs yesterday.
The export slide poured cold water on forecasts from bullish economists, who expected a recovery in the country's exports would accelerate along with improved consumer confidence in the United States and Europe in the second half of this year.
'The persistent weakness in trade data so far this year highlights the ongoing dependence on domestic demand for growth,' said Morgan Stanley chief economist Wang Qing, who estimated a 19 per cent decline in exports. 'We remained convinced the worst is over for the trade sector. The improvements will likely be rather impressive in the fourth quarter.'
Sluggish imports and exports left the trade surplus 46.5 per cent lower at US$15.7 billion, or 19 per cent lower in the first eight months. In the eight-month period, exports declined 22.2 per cent to US$730.74 billion while imports dropped 22.7 per cent to US$607.92 billion.
Despite this, the customs administration said August's exports improved 3.4 per cent and imports rose 1 per cent from July after removing seasonal factors.
A Goldman Sachs report blamed last month's lacklustre imports on weaker commodity prices such as iron ore and lower freight costs.
