China's import growth fell sharply to its slowest pace in 20 months in June in further evidence of the broad impact of monetary tightening on the economy, while a wider trade surplus suggested capital inflows will remain a challenge for authorities.
The substantial drop in June import growth, which decelerated to a 19.3 per cent annual pace from May's 28.4 per cent, is bound to heighten investor concerns about how swiftly the world's second-largest economy is slowing.
But, coming a day after data showed June inflation hit a 3-year peak, analysts took the jump in the trade surplus as a sign that China might have to raise rates further, both to rein in prices and to combat capital inflows.
'The trade surplus surged in June,' said Liu Li-Gang, an economist with ANZ.
Source : New Age
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