Trade champions faltering

According to fresh figures released by the German statistics office, Destatis, on Tuesday, the eurozone's biggest economy shipped goods and services worth 107.2 billion euros in June - down by 2.8 percent from Mai this year.

The steepest June decline in more than two years ended five months of gains in German exports and was significantly lower than had been expected by analysts who predicted a drop by 0.3 percent in seasonally adjusted terms in a poll by the Reuters news agency.

German imports even fell by 4.5 percent in what was the biggest monthly fall since 2009. Falling imports helped bulk up the country's trade balance, which measures the difference between exports and imports, to 22.3 billion euros.

Compared with the same month a year ago, German trade figures still show a slight increase by 0.7 percent in exports and 3.6 percent regarding imports. Therefore, economists are not alarmed by the disappointing June figures.

Folker Hellmeyer from German regional lender Bremer Landesbank called the June figures a "one-off event" which would be offset by trade growth in the coming months. "Global trade is gathering momentum which will have a positive effect on German exports. Growth in orders and inventories show that the German economy is in a solid state," he told the news agency Reuters.

Andreas Rees, analysts with Unicredit, also believes that the upward trend ibn trade growth will remain unbroken, and that the slowdown was only of a technical nature after five months of gains.

China surprises on the downside

Chinese trade also slowed significantly in July, but remained in growth territory, official data released on Tuesday showed. Calculated in US dollars, exports had risen at the weakest pace since February to a total $193.6 billion in July, and imports had increased at the weakest rate since December to $146.9 billion, China's General Administration of Customs said.

Analysts said that while export and import rates were still robust year-on-year, the latest data indicated a downward trend.

"Despite the uptick at the end of [the second quarter], trade growth now appears to be on a downward trend," said Julian Evans-Pritchard, a China economist at Capital Economics. "In particular, the sharp decline in import growth since the start of the year suggests that domestic demand is softening."

Growth in exports to most major trading partners was down visibly, with those to the US falling more than 10 percentage points from the previous month to notch year-on-year growth of just 8.9 percent in July.

Growth in shipments to South Korea more than halved to 3.6 percent for the period and exports to EU countries slowed 5 percentage points for growth of 10.1 percent. Shipments to Japan bucked the trend, however, picking up 1.1 percentage points for a rise in value of 6.6 percent year on year in July.

uhe/kd (Reuters, dpa, AFP)