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China trade picture remains grim in August

Kevin Phillips | Getty Images

China's trade picture remained grim in August, denting hopes that the shaky global economic recovery could regain its poise.

China's dollar-denominated exports declined by 5.5 percent year-on-year in August, while imports slid 13.8 percent, producing a trade surplus of $60.24 billion.

China's foreign trade activity has weakened dramatically in recent months. Exports have been hit by sluggish global demand, while imports have been constrained by a slowing domestic economy and depressed commodity prices.

Gross domestic product (GDP) growth is expected by some economists to slip below 7 percent in the third quarter – down from 7 percent in both the first and second quarter. Over the weekend, China's Finance Minister Lou Jiwei said that the world's second largest economy had entered a "new normal" of slower growth, adding that a growth rate of around 7 percent was to be expected in the coming four to five years.

China's economic downturn has sent shockwaves across the region, as evident in the deteriorating trade data of neighboring Taiwan and South Korea, which reported plummeting exports in August. Taiwan's exports plunged 14.8 percent on year last month, while Korea's exports contracted 14.7 percent, largely attributable to retreating mainland demand.

Tuesday's trade data is the first in a slew of economic indicators due out this week from the world's second-largest economy. China is due to report inflation data on Thursday, followed by retail sales, industrial production and fixed asset investment on Sunday; all of which is unlikely to quell intensifying concerns over the health of China's economy.