China imports sink in August, shares rally but volumes dive
By Pete Sweeney and Samuel Shen
SHANGHAI (Reuters) - China's imports tumbled in August, raising concerns about the health of the world's second-largest economy and its contribution to global growth.
The data will add to the pressure on Beijing policymakers trying to ensure China's economy avoids a hard landing, though authorities will take some comfort that their efforts to steady the country's stock markets were rewarded with a late rally on Tuesday.
Imports dived 13.8 percent from a year earlier, far more than analysts had forecast, and a tenth consecutive monthly drop, reflecting both lower global commodity prices and sluggish demand.
A surprise devaluation in the yuan early last month combined with slowing consumer demand will dent the prospects of imports picking up significantly anytime soon.
Much of China's imports are commodities and other raw materials going into factories that turn them into goods for sale overseas, so the fall could be an ominous sign for exports in the coming months.
Exports fell less than forecast, sliding 5.5 percent, but analysts were still doubtful that China can now achieve its year-end trade growth target of 6 percent.
"The yuan devaluation will have limited impact on exports, which are falling because demand is weak, not because the price is not good," said Li Jian, head of foreign trade research at the Chinese Academy of International Trade and Economic Cooperation, the Commerce Ministry's think-tank.
China's foreign exchange reserves posted their biggest ever monthly fall in August, reflecting Beijing's efforts to stabilize the yuan following its devaluation. Continued...