Chinese imports drop 13.8%, casting more doubts about its economy
Regulators draft new rules that would halt stock trading when market drops 5% or more
A day after revising its 2014 GDP growth figures downwards, China got more bad news about its economy with data showing the dollar value of its foreign trade dropped 9.7 per cent in August.
Exports for August fell by 5.5 per cent from the previous year and imports were down a steep 13.8 per cent, raising more doubts about the health of the world's second-largest economy.
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The massive explosion at the busy Tianjin port and the shutdowns mandated ahead of China's three-day military holiday may have hurt August figures.
But the news is a poor sign for countries that supply China with commodities and other goods, as it shows China may not resume its role of powering markets for raw materials.
On Monday, Chinese officials revised the estimated growth for 2014 to 7.3 per cent from 7.4 per cent. The figures for the latest quarter remain at about seven per cent on an annualized basis, the stated target of the Chinese government.
But many analysts are doubtful how accurate Chinese data may be, fearing the economy may end up growing at an even slower pace this year.
Factory purchasing, retail sales and overall investment numbers released in the past few weeks are all dismal.
Beijing has been trying to steer the economy away from growth based on trade and capital investment, toward growth based on slower, self-sustaining domestic consumption.
And the devaluation of the yuan has not yet had the desired effect of boosting trade, as the rest of the world is slowing its demand for Chinese goods.
China also devalued the yuan by three per cent last month in a surprise move that some analysts interpreted as an attempt to stimulate exports but which Beijing said was a move toward a more market-determined exchange rate.
New circuit-breakers for stocks
Instead, it's unleashed market turmoil that has reverberated around the world and further shaken faith in the Chinese leadership.
On Tuesday, there were reports that Beijing is preparing new mechanisms to try to stem losses on its volatile stock market.
Regulators are drafting a "circuit-breaker" regulation which would suspend trading for 30 minutes when the market rose or fell by five per cent. If the index went up or down by seven per cent or more, trading would be suspended for the day.
The news seemed to buoy confidence in Chinese stocks.
The Shanghai Composite index closed down 2.5 per cent on Monday after a three-day vacation, but was up 2.9 per cent on Tuesday, to 3170. China's market has lost 40 per cent since its peaks in June.
With files from The Associated Press