China turned in a dismal foreign trade performance in July, with its trade surplus falling 10 percent on the year to around 263.0 billion yuan ($43.1 billion), customs said on Saturday, which could spell more worry for the world's second largest economy.

Exports plunged 8.9 percent year-on-year to 1.19 trillion yuan, while imports dropped 8.6 percent to 930.2 billion yuan, it said in a statement on its website.

Exports are a key driver of China's economic growth, while falling imports can indicate weak domestic demand.

A stronger yuan currency, which makes China's exports more expensive, has hurt the country's overseas sales, analysts say.

"The yuan has been stronger against the euro, and it's hurting Chinese exports to Europe," Li Miaoxian, a Beijing-based economist at Bocom International Holdings Co., was quoted by Bloomberg News as saying.

China's economy, a key driver of global growth, expanded 7.4 percent last year, its weakest since 1990, and has slowed further this year, growing 7.0 percent in each of the first two quarters. The government has targeted annual economic growth of around 7.0 percent for all of 2015.

The People's Bank of China, the central bank, in June announced its latest cut in interest rates, marking the fourth such move since November to boost lending as a driver for the economy.