China imports down 2.3% on year in June

China's imports fell 2.3 percent year-on-year in yuan terms in June, official data showed on Wednesday, in a possible sign of weakening domestic demand in the world's second-largest economy. 

Exports rose 1.3 percent on year, Customs said, while the monthly trade surplus jumped 12.8 percent to 311.2 billion yuan (around $46.5 million).

As the world's biggest trader in goods China is crucial to the global economy and its performance affects partners from Australia to Zambia, which have been battered by its slowing growth -- while it faces headwinds itself in key developed markets.

Its imports have been shrinking since late 2014 as the country's once blistering expansion lost steam, slowed down by manufacturing overcapacity, a slowing property market and mounting debt. 

June's decline came after a surprise rebound in May that suggested demand was strengthening. 

Customs attributed the fall in import values to weakening commodity prices.
“The input volume of major bulk commodities such as iron ore, crude oil and copper maintained growth," it said in a statement. "The prices of major import commodities remained low with a narrowing price decline."

China imports and exports both fell in the first half of the year in yuan terms, by 4.7 percent and 2.1 percent respectively.

Customs said there were "obvious obstacles" blocking China's foreign trade development, particularly the decline in business in both directions with major trading partners such as the US and ASEAN.

Analysts with SG Global Economists said in a report before the results that export strengthening was due to a recovery in the electronics sector, despite lacklustre overseas demand. 

A falling yuan currency in recent weeks could give further support to China's manufacturing against foreign competitors. 

But uncertainties over Britain's exit from the European Union, expected US interest rate hikes, terrorist threats, and weak global demand weighed on trade prospects, Customs spokesman Huang Songping told reporters.

Exports faced large downward pressures in the third quarter, he said.

"The domestic economy has been operating steadily but downward pressures have continued to increase. Companies' costs have remained high and some industries and orders have been shifted abroad."