China's trade surplus fell to 99.03 billion U.S. dollars in the first half of this year, down 11.8 percent from the same period last year, the General Administration of Customs said on Thursday.
Analysts said the fall was partly a result of China's policies to tame surplus, but was also in part because of the rising prices of energy and resources.
The global slowdown in the wake of the economic crisis sparked by the U.S. subprime mortgage disaster has also played a negative part.
Exports maintained a rapid growth to increase 21.9 percent year-on-year to 666.6 billion U.S. dollars, while imports rose 30.6 percent to 567.57 billion U.S. dollars.
The total trade volume in the first six months stood at 1,234.17 billion U.S. dollars, a year-on-year rise of 25.7 percent.
"The trade surplus decline in the first half was broadly in line with market expectation", said Li Jian, an expert with the Academy of International Trade and Economic Cooperation under the Ministry of Commerce.
He also noticed that the fast-growing demands from emerging economies had helped to uphold the country's export growth.
China's exports to the United States and the European Union (EU) rose 8.9 percent and 27 percent in the first half, 8.9 and 3.2 percentage points lower than the same period last year.
Yet, exports to India and Brazil demonstrated strong momentum to go up by 52.9 percent and 86.3 percent.
Li said the external demands would not shrink dramatically as China's manufacturing sector still enjoyed a great advantage of low costs.
"The strong import growth was partly contributed by price rises of commodities on the international market," said Zhang Xiaoji of the State Council's Development Research Center.
He said one third of the import growth was caused by rising global prices of primary products.
The country's imports of primary products soared 69.9 percent to 184 billion U.S. dollars in the first half of this year.
The average import price of iron ore, crude oil, refined oil and soy beans, in the same period, increased 77.4 percent, 67.3 percent, 77.3 percent and 78.3 percent, respectively, according to the customs report.
Exports in June alone rose 17.6 percent from June last year to 121.53 billion U.S. dollars, while imports shot up 31 percent to 100.18 billion U.S. dollars.
The June export growth further slowed from May by 10.5 percentage points, and the import growth was 9 percentage points lower.
The export slowdown led the June trade surplus to 21.35 billion U.S dollars, down 20.66 percent from the same month last year.
Analysts said slowing export growth reflected weaker global demands, and could cool the country's economy growth. The National Bureau of Statistics is scheduled to reveal the country's economic data for the second quarter next Thursday.
Li said middle and small-sized enterprises are faced with extremely difficult situations. "The accelerated appreciation of the yuan, fund shortage, continued price rises of raw materials, and labor cost increases have forced more and more enterprises into financial loss or bankruptcy."
Zhou Shijian, an expert with the China Trade Association, said the country needed to make more efforts to stabilize exports by upgrading labor-intensive industries, which means a lot to employment and social stability.
"We should be aware that profits of exporters are squeezed by rising costs despite the growth in exports, and companies are challenged by higher costs," Zhang warned.
China's textile and shoe-making sectors are among the hardest hit by rising labor cost and price rises in raw materials.
The customs report revealed that apparel exports rose 3.4 percent in the first half, 18.3 percentage points lower than a year earlier, while shoes exports were up by 12.5 percent, 4.7 percentage points lower.
"Most enterprises now hope the country's trade, foreign exchange and financial policies will remain stable for some time, so that they will be able to take the time to make the appropriate transformation to improve their competitiveness and absorb the risks", said Li Jian.
"Demand for Chinese goods was not shrinking, because the country's inexpensive and quality products are still welcomed by the world's customers and might be more popular as the world economy slows down," Li said.
Trade with the EU, China's largest trade partner, rose 27.7 percent to 202.14 billion U.S. dollars in the first six months.
The U.S. secured its place as the second largest trade partner, with a total trade of 158.34 billion U.S. dollars, up 12.6 percent. Trade with Japan came to 129.66 billion U.S. dollars.
The surplus with the U.S. in the first half hit 75.3 billion U.S. dollars, a year-on-year rise of 1.84 percent.
Trade with India, the eighth largest trade partner, saw the fastest growth among China's top 10 trade partners, up 69 percent to reach 29 billion U.S. dollars.
(Xinhua News Agency July 10, 2008)
