China's trade surplus surged unexpectedly last month to an 18-month high of $28.7 billion as exports beat forecasts, but a government-induced slowdown in investment took a toll on imports.
Beijing is steering its super-loose monetary and fiscal policies back to normal after a record surge in credit last year to combat the global crisis. It has reined in lending to local authorities and mounted a drive against property speculation.
Annual import growth moderated to 22.7 per cent from 34.1 per cent in June, well below forecasts of a 30 per cent rise, providing clear evidence that the measures are biting.
"We have carried out a proactive adjustment of economic growth. With economic growth slowing down, import growth is also easing," Huang Guohua, an official at the General Administration of Customs, which released the data, told state television.
The disappointing figures, which partly reflected a 4.5 per cent fall in import prices in July, sent the main Shanghai stock index tumbling 2.3 per cent and weighed on shares in Hong Kong, underlining investors' fears that the global economic recovery is losing momentum.
"We expect import growth to slow further for the rest of the year as the domestic economy is coming off the boil," said Nie Wen, an analyst at Fortune Trust Co in Shanghai.
Exports, by contrast, held up well in July, rising 38.1 per cent from a year earlier to a record high of $145.5 billion.
Growth was down from June's 43.9 per cent pace but exceeded projections of a 35.5 per cent rise, partly because exporters rushed to beat the July 15th removal of tax rebates on an array of steel and other products.
The resulting trade surplus of $28.7 billion, the highest since January 2009, dwarfed forecasts of $19.0 billion as well as June's $20.0 billion total.
Reuters