China June trade surplus down 14.0%

China's trade surplus fell 14.0 percent in June, data showed, as imports and exports both saw an unexpected dip, suggesting a further slowdown in the Asian economic giant on the back of global weakness. Exports fell 3.1 percent to $174.32 billion, according to figures from Customs, while imports decreased 0.7 percent to $147.19 billion, leaving a trade surplus of $27.13 billion. A survey of 20 economists by Dow Jones Newswires had shown average expectations of a 3.3 percent rise in exports and a 5.5 percent increase in imports. "Currently China's foreign trade is facing grave challenges," Customs spokesman Zheng Yuesheng told reporters. He said "prolonged sluggish foreign demand" was the main cause, followed by rising export prices in foreign currency terms, labour costs, and a deteriorating trade environment due to rising trade disputes. Alarm bells have rung over the health of China's rebound from a prolonged downtrend as trade and manufacturing conditions have worsened this year. China's economy grew 7.8 percent in 2012, its worst performance in 13 years, on the back of slack demand for exports and weakness at home. The first three months of the year saw expansion of just 7.7 percent, disappointing analysts who had expected growth to accelerate after showing strength at the end of 2012. The government has set a growth target for 2013 of 7.5 percent, the same as last year's, as it looks to retool its economic model from exports to domestic consumption. Beijing is due to announce gross domestic product figures for the second quarter on Monday. China's June trade figures came after the International Monetary Fund on Tuesday cut its global economic growth forecast, citing new downside risks in key emerging-market economies and a deeper recession in the eurozone. The IMF projected the world economy to expand 3.1 percent in 2013, down from its April estimate of 3.3 percent. China and other emerging economic powers now face new risks, it warned, "including the possibility of a longer growth slowdown". Zheng said the factors bedevilling China's trade situation are likely to linger over the short term. "Trade still faces a complicated and volatile situation in the second half of the year and there are a lot of difficulties and challenges," he said. But China's trade surplus for the first six months of 2013 was substantially higher than the same period last year, the statistics showed, up 58.5 percent to $107.95 billion. First half exports rose 10.4 percent to $1.05 trillion and imports increased 6.7 percent to $944.87 billion. On Tuesday, the government announced that China's inflation accelerated to 2.7 percent in June, but analysts cautioned that demand remained weak and second-quarter economic growth may have slowed further. The year-on-year figure for the consumer price index -- a main gauge of inflation -- was up from 2.1 percent in May, the National Bureau of Statistics (NBS) said. That was higher than market expectations of 2.5 percent in a poll of 18 economists by Dow Jones Newswires.