China's trade slump extended into September, with imports collapsing and exports remaining feeble, underscoring the fragile state of the world's number two economy.
Dollar-denominated imports plunged by a worse-than-expected 20.4 percent in September from a year earlier, while exports slipped 3.7 percent, producing a trade surplus of $60.34 billion, official data showed on Tuesday.
Economists polled by Reuters had forecast imports to fall 15 percent, following a 13.8 percent slide in the previous month, and exports to decline 6.3 percent, after a 5.5 percent decline in August.
"Given the slight recovery in commodity prices, the decline in imports suggests sluggish domestic demand – in particular, investment demand," said Yang Zhao, China economist at Nomura. The 20.4 percent drop in imports is the biggest monthly decline since February.
The moderation in the contraction of exports is likely due to mild improvement in external demand, Zhao said. "Moreover, the better export data could be partially explained by a rather large appreciation of EUR against CNY in September from August, compared to a sharp depreciation of EUR against CNY in August-September 2014," he noted.
Alongside the release of the data, a spokesman for the country's customs department warned that the mainland economy faced relatively large downward pressure, Reuters reported. However, he noted that China's trade picture should improve in the fourth quarter as a weaker yuan helps export competitiveness.