China's exports drop 6.9pc as imports fall, raising fears economy heading for hard landing
While Beijing has already repeatedly cut interest rates and softened the exchange rate to prop up the economy, latest trade numbers suggest that a greater risk of a hard landing remains.
October exports fell 6.9 per cent from a year ago, dropping for a fourth month, while imports slipped 18.8 per cent, leaving the country with a record high trade surplus of US$61.64 billion, the General Administration of Customs said on Sunday.
A range of economists had expected dollar-denominated exports to fall 3 per cent after September's 3.7 per cent dip, and imports to decline 16 per cent, improving from a sharp drop of 20.4 per cent.
Combined exports and imports fell 8.5 per cent in the first 10 months from a year earlier, well below the full-year official target for growth of 6 per cent.
Last week, the Ministry of Commerce said the value of China's exports this year was likely to stay similar to 2014 levels, while imports could drop sharply in the fourth quarter.
For 2016, the ministry expects to see steady growth in combined exports and imports as policy measures to support the trade sector take effect.
Some analysts expect to see further rate cuts before the end of the year, but while this will relieve firms with high debt loads - which are concentrated in the state-owned sector - so far rate cuts have done little for exports.
Buyers at the Canton Trade Fair, which ended last week, saw contract values fall 7.4 per cent from the last fair with attendance also declining.