China trade surplus narrows in June as exports fall

China’s exports fell in dollar terms in June from a year earlier as demand for goods from the nation remained weak.

Exports dropped 4.8% in June compared to a year ago, following a 4.1% drop in May, according to the General Administration of Customs on Wednesday. Economists had expected a 5% decline.

Imports decreased 8.4% year-on-year in June, more than the 6.2% slide expected by analysts, following a 0.4% fall.

The trade surplus narrowed to $48.11bn in June from $49.98bn a month earlier, compared to forecasts of $45.65bn.

The yuan fell 0.13% against the dollar to $0.14947 at 0918 BST.

“The recent decline in the yuan against the US dollar has prompted concern in recent days that the Chinese economy may not be doing as well as originally thought,” said Michael Hewson, chief market analyst at CMC Markets.

“The strength of the yuan has acted as a brake on Chinese exports in recent months and this could well be why Chinese authorities have allowed the yuan to drift lower in recent weeks. This morning’s trade numbers could well reflect that concern with June exports expected to decline by 5% contrasting with the 4.1% decline in May.

“The inability to boost exports is likely to increase the pressure on the yuan in the short term, which in turn could well see it decline further towards 6.80 against the US dollar.”