China exports and imports drop more than expected

China's exports and imports dropped more than expected in October, as weak domestic and global demand added to doubts that a pick-up in economic activity in the world's largest trading nation could be sustained.

October exports were down 7.3 per cent from a year earlier, even as imports shrank 1.4 per cent, official data showed Tuesday, which heightened fears of a broader recovery seen in recent months, faltering. While, according to recent data, the world's second-largest economy was steadying, analysts had warned that a property boom that had generated a significant share of the growth might bepeaking, hurting demand for building materials from cement to steel.

China's imports of iron ore, crude oil, coal and copper were down in October, following its robust demand pushing global prices of many major commodities higher this year.

Though, according to some analysts, the decline might be seasonal, data from industry consultancy Custeel.com suggested steel mills had been cutting output and even starting maintenance work earlier with costs for raw materials such as iron ore and coal increasing and squeezing profits.

According to estimates of analysts polled by Reuters, October exports were expected to fall 6 per centfrom a year earlier, as against a 10 per cent contraction in September. Imports were expected to be down 1 per cent, after a 1.9 per cent fall in September. 

"Goods exports improved somewhat in October after the major setback in September, but not enough to prevent a further loss of momentum and underscoring that the recent trend toward somewhat stronger global demand growth remains fragile," Louis Kuijs of Oxford Economics said in a report.

Growth in the world's second-largest economy came in at 6.7 per cent in the three months ending in September, however, that was the lowest quarterly level since the 2008 global crisis. The growth of the economy was supported by consumer spending and a bank lending boom, however, forecasters expect it to weaken with regulators trying to cool a surge in real estate prices and credit.