After data on inflation and domestic sales, exports drop by 3.1 per cent compared to last year, the first decline since January 2012. For analysts, China is paying a price for a stable currency and higher labour costs.

Beijing (AsiaNews/Agencies) - For the first time in 17 months, China's exports fell. The global economic crisis, rising labour costs and a stronger yuan cut exports by 3.1 per cent compared to last year, the first decline since January 2012. Economists had expected an increase of 4 per cent in exports and 8 per cent in imports.

In particular, exports to the United States fell by 5.4 per cent and those to the European Union by 8.3 per cent. Although the trade surplus increased, compared to May, from US$ 20.4 billion to US$ 27.13 billion, that was lower than expected by half a billion.

Negative export data come on top of negative reports released earlier this month about inflation and domestic demand.

For domestic and foreign analysts, although signals are "negative" compared to forecast, there is a silver lining in lower exports. The government can better fight speculative trading activities that, in the long run, produce economic bubbles that are much more harmful than a slowdown caused by lower sales.

"The surprisingly weak June exports show China's economy is facing increasing downward pressure on lacklustre external demand," said Li Huiyong, an economist at Shenyin & Wanguo Securities in Shanghai. "Exports are facing challenges in the second half of this year. The appreciation of US dollar and the Chinese government's recent crackdown on speculative trade activities also put pressure on exports."

• china
• exports
• slowdown
• inflation