The Chinese government’s effort to re-balance the country’s economy has hit the domestic demand with import growth slowing down in June.
Latest government data showed imports to China grew by 19.3% in June, a sharp decline over 28.4% recorded in May. Exports growth for the month also dipped marginally to 17.9% from 19.4% recorded in May.
China is the world’s biggest exporter and the second largest economy. However, lower numbers did not affect the balance of trade and the country recorded a trade surplus of $22.3 billion for the month.
David Cohen of Action Economics in Singapore said imports were below expectations. “We are perhaps seeing some reflection of loss of momentum in China’s growth”, he added.
The recent initiatives by China to tighten its monetary policy have started to slowdown the economic growth of the country, said Mr. Cohen.
“The numbers are consistent with decelerating growth, with the soft landing that many people are looking for”, said Cohen.
Domestic demand in the country has been hit by rising inflation alarming analysts. Data released on Saturday showed the country’s inflation rising by 6.4% in June compared to a year ago, also the highest jump in three years.