2014.07.1003:02:00UTC+00China's June Exports Rise Less Than Forecast

Chinese exports expanded less than expected in June signaling that foreign demand provide insufficient support for the economy to achieve its 7.5 percent growth target.

Exports grew 7.2 percent in June from last year, data from the General Administration of Customs showed Thursday. Although the annual growth was faster than the 7 percent rise posted in May, it was below the 10.4 percent increase forecast by economists.

Imports also climbed by a less-than-expected 5.5 percent in June. It reversed May's 1.6 percent fall but was weaker than the expected 6 percent growth.

Consequently, the trade surplus decreased to $31.6 billion from $35.9 billion in May, when it was forecast to rise to $36.9 billion.

Nonetheless, the customs office said export growth will accelerate in the third quarter.

Looking ahead, Julian Evans-Pritchard, an economist at Capital Economics said headline export and import growth are likely to fall back again this month, as the base effect fades.

More broadly though, improving conditions in developed markets mean that the export growth is likely to remain healthy going forward, despite today's disappointing data, he said.

In contrast, the economist expects import growth to drop further, given as cooling investment growth will weigh on commodity imports over the next couple of years. As a result, China is likely to continue to post large trade surpluses, he said.

Premier Li Keqiang said early this week China's economic performance improved in the second quarter from the previous period. But further modest measures will be required to support growth.

The National Bureau of Statistics is set to publish second quarter GDP data on July 16.

In the first quarter, China's economy grew 7.4 percent, the slowest pace in one and a half years. China struggles to achieve its growth target of about 7.5 percent this year.

Finance Minister Lou Jiwei on Wednesday said China cannot stop currency interventions as the economy has not fully recovered and cross border capital flows are not completely normal.