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China's exports fell 3.1% in June from a year earlier, the first decline since January 2012, while imports dropped 0.7%, severely missing market expectations and reinforcing signs of a economic slowdown in the second quarter.
The downbeat trade data follow the government's crackdown on the use of fake export shipment documents to close a loophole for short-term money inflows which had exaggerated China's export performance.
Economists had expected exports to grow 4.0% and imports to rise 8.0% last month.
China's exports to the United States - the country's biggest export market, fell 5.4% in June from a year earlier, while export to the European Unison dropped 8.3%, according to the customs.
"The surprisingly weak June exports show China's economy is facing increasing downward pressure on lacklustre external demand," said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai
"Exports are facing challenges in the second half of this year. The appreciation of US dollar and the Chinese government's recent crackdown on speculative trade activities also put pressure on exports."
China had a trade surplus of $27.1 billion in June, the customs administration said in a news briefing, largely in line with $27.0 billion expected by economists.
China's trade data are volatile and distorted by speculative capital flows across the country's border. Doubts about the accuracy of the figures have abated slightly since the customs office and top foreign exchange regulator launched a campaign in May to crack down on fake export claims.
China's reform-minded new leaders have shown a great tolerance of slower growth, although they still need to avoid widespread job losses that could threaten social stability.
Economists expect annual growth in China to slow down to 7.5% in the April-June period, with no recovery in sight yet, testing the top leaders' resolve to tolerate a slowdown in the short run while press ahead with efforts to revamp its economy for the long-term good.
