China trade data for July misses forecasts

Chinese trade data released on Monday morning pointed to still soft economic conditions in Asia´s largest economy, although some economists were sanguine regarding the immediate outlook.

Exports shrank by 4.4% year-on-year in US dollar terms (consensus: -3.3%) in July, after a drop of 4.8% in the month before.

Even upon seasonal adjustment, they were down, “dashing hopes that they might be buoyed by a pick-up in global manufacturing growth last month”, said Julian Evans-Pritchard, China economist at Capital Economics.

Shipments to the US were one exception, but those to other countries continued to retreat.

Imports on the other hand were down by 12.5% year-on-year (consensus: -7.5%), following a fall of 8.4% in June.

“This [reduction in imports] was partly due to a deeper contraction in imports for processing and re-export. Imports for domestic use are still holding up better, though they too slowed last month,” Evans-Pritchard added.

"This perhaps talks to the still tepid global economy and the weaker Yuan that originally stemmed from last August's shenanigans," chipped in Jim Reid at Deutsche Bank.

Commodity import volumes also slowed.

“Looking ahead, we are not overly concerned about the immediate prospects for China, despite today’s disappointing data. Granted, export demand is likely to remain subdued for some time. While we think the worst is probably over for many emerging markets, global growth is likely to remain lacklustre well into next year,” Capital Economics concluded.