China’s July exports fall 8.3% on-year

But that is no longer the case, hampering economic growth.

The government has targeted annual economic growth of around 7.0 percent for all of 2015.

The top government body in China, the State Council announced in July it would put high priority on the trade sector in the country providing the sector with tax breaks and cut red tape while lowering its import duties. He pointed out towards accelerating infrastructure spending as a viable alternate solution. The People’s Bank of China has lowered interest rates four times since November to support an economy expected to grow this year at the slowest pace since 1990.

“There is no quick turnaround in sight”, said Liu Yaxin, an analyst at China Merchants Securities.

Analysts say Beijing has been keeping its yuan strong to wean its economy off low-end export manufacturing.

Strong yuan also had an impact on the Chinese exports. Separately, the agency said the trade surplus in yuan currency terms narrowed by 10 percent on the year. “We have got a real concern there for the future levels of the Aussie dollar”, Koukoulas said.

“I do believe the trade data in the third quarter will have the same weakening trend on-year as overall economic growth, which we estimate will stand at 6.9 percent (for the quarter)”, Nomura International’s China economist Wendy Chen told AFP.

For now, China’s central bank is showing no sign of easing its grip on the currency and letting the yuan depreciate-despite pressure from exporters for help.

The central bank said in its quarterly monetary policy report Friday that it would let the market play a bigger role in setting exchange rates while keeping them “at a reasonable equilibrium level”. The trade surplus was also under expectations – $43.03 billion for July.

China is under growing pressure to further stimulate its economy after disappointing data over the weekend showed another heavy fall in factory-gate prices and a surprise slump in exports.

The data showed pork price inflation was the most buoyant in July, with prices surging 16.7 per cent due to a sharp fall in hog supplies. The producer-price index dropped 5.4% in July from a year earlier, accelerating its decline from a 4.8% year-over-year drop in June, and exceeding market forecasts.

Pork is a key component in the diet and the importance of pig meat to the consumer-price index basket was reflected in a 1.6 per cent year-on-year rise in the CPI, offsetting sluggish growth in the cost of non-food items.

Grace Zhu contributed to this article.