China June trade data misses forecasts

Trucks drive past piles of shipping containers at the Qingdao Port, Shandong province June 8, 2014. [Photo/Agencies]

China's trade performance improved in June but still missed market forecasts, reinforcing expectations that Beijing will have to unveil more stimulus measures to stabilize the economy and meet its 2014 growth target.

Exports rose 7.2 percent in June from a year earlier, the best pace in five months, but well below a median forecast in a Reuters poll for a rise of 10.6 percent.

Imports also missed expectations, growing by 5.5 percent versus forecasts of 5.8 percent, although they returned to positive territory after a small drop in May.

China's combined exports and imports edged up just 1.2 percent in first six months of the year, data showed on Thursday.

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"For the economy to rebound in the second half of this year, we believe more policy support is necessary due to the unsteady recovery base," said Wang Jun, economist at the China Centre for International Economic Exchanges, a think-tank in Beijing.

Premier Li Keqiang said on Monday that economic growth quickened in the second quarter from the previous three months, but added that further modest government support measures will still be needed. Beijing has set an annual growth target of around 7.5 percent.

Since April, China has steadily loosened policy by reducing the amount of cash that some banks have to hold as reserves, instructing regional governments to quicken their spending, and hastening the construction of railways and public housing.

Evidence has mounted in recent weeks that those measures are beginning to have some effect, arresting a cooldown in activity which saw growth slide to an 18-month low of 7.4 percent in the first quarter.

The latest Reuters poll showed the economy probably steadied in the second quarter, with annual growth holding firm at 7.4 percent as the policy measures kicked in.

But economists say the recovery still appears patchy, and more stimulus may be needed to offset the downdraft from a cooling property market on the broader economy.

Data on Wednesday showed consumer inflation cooled slightly more than expected in June while producers' prices fell for the 28th straight month, signaling domestic demand remained lukewarm.

Second-quarter GDP along with June retail sales, industrial output and investment data will be released on July 16.