China’s trade surplus widened to US$26.7 billion last month as imports registered a surprise fall, data showed yesterday, adding to expectations of a new round of stimulus measures.
The figures highlight waning strength in the world’s second-largest economy, as the broader global slowdown and the European debt crisis dragged on exports, which remained weak.
Exports increased 2.7 percent last month year-on-year to US$178 billion, the General Administration of Customs said in a statement on its Web site. Imports fell 2.6 percent to US$151.3 billion.
The increase in exports last month outpaced the 1 percent gain registered in July and was also slightly better than the 2.5 percent increase forecast in a survey of economists by Dow Jones Newswires, though is far below the kind of export growth China has experienced in recent years.
The decline in imports, meanwhile, came as those economists had expected a 3.4 percent rise and follows two straight months of slowing growth.
GDP in China, a key engine of the global economy, grew 7.6 percent in the second quarter through June, its worst performance in three years.
The government is targeting full-year expansion of 7.5 percent this year, though that is well below the 9.3 percent recorded last year and the 10.4 percent in 2010.
Lu Ting (陸挺), China economist at Bank of America Merrill Lynch, said that the worsening situation is likely to tip Chinese authorities to push further stimulus measures.
“With worsening growth outlook and muted inflation pressure, we expect the government to take more action to support growth,” he said in a report.
Lu added that such efforts will likely focus on improvements to urban infrastructure and increasing the supply of land as well as two additional cuts by the central bank to reserve ratio requirements for banks and the easing of some curbs on lending.
China has already taken steps this year to stimulate growth by cutting interest rates twice in quick succession and slashing the amount of funds banks must keep in reserve as methods to stimulate lending.
A slight acceleration announced on Sunday in consumer price inflation, which rose 2 percent last month, has led to speculation the People’s Bank of China will be reluctant to slash borrowing costs again soon.
“The possibility of cutting interest rates within this year has greatly decreased, though there is still room to lower reserve ratios,” the China Securities Journal, a state-run newspaper, said in a commentary yesterday.
The government is now also pushing other measures to bolster the economy. State media reported on Friday the approval of an infrastructure package worth more than 1 trillion yuan (US$158 billion), involving 55 projects ranging from subway lines to highways.
China carried out a massive 4 trillion yuan fiscal stimulus package in the wake of the global financial crisis in 2008.
Last month’s trade figures are the latest in a string of weak data that has confirmed a deepening slowdown in China’s economy.
Official figures on Sunday showed that industrial output growth weakened last month to its slowest pace in more than three years.
Production increased just 8.9 percent year-on-year — the lowest result since a similar rise of 8.9 percent in the depths of the global economic crisis in May 2009.