The drop comes after a surprise 3.3 per cent rebound in July despite the yearlong battle with Washington and weakening global demand. But economists cited by Bloomberg had forecast a 2.2 per cent rise ahead of the release of Sunday’s figures by the customs administration.
China’s trade surplus also dropped sharply in August to USD 34.83 billion, from USD 44.58 billion the previous month, while imports continued a four-month decline at 5.6 percent on-year, matching the July figure.
Washington imposed new tariffs on September 1 as it stepped up its high-pressure campaign to coerce Beijing into a new trade deal.
The additional levies come on top of the 25 per cent tariffs on USD 250 billion in imports already in place. China said Thursday that new talks with the US would be held in Washington in early October.
In a sign of continued pressure on the Chinese economy, Beijing’s central bank announced Friday it would cut deposit reserve requirements for banks. The measure would allow an estimated USD 126 billion in additional loans to businesses facing an economic slowdown.
China’s GDP growth was 6.2 per cent on-year in the second quarter, the lowest rate in nearly three decades.