China's trading failed to meet expectations for the month of July, with domestic demand struggling despite efforts in Beijing to jump-start the economy.
New figures for last month show that exports shrank 4.4% year-on-year. While this improved on June's 4.8% decline, it didn't match forecasts.
Imports were fared even worse, declining 12.5% year-on-year. It is the country's biggest import decline since February. China's imports have now declined for 21 straight months.
These figures come despite a 6% depreciation of the yuan against the dollar during the last 12 months.
The news has concerned economists at the start of a busy week that will see data released for China's July inflation tomorrow, as well as figures for industrial production, retail sales, new loans and M2.
According to Reuters, Capital Economics' China economist Julian Evans-Pritchard foresees trouble ahead.
"Signs of stronger manufacturing activity among many of China’s key trading partners has so far failed to lift export growth.
"The country’s export growth is likely to remain subdued for some time.”
IG Markets analyst Angus Nicholson told the Wall Street Journal that China's trading partners will be particularly worried that its trade surplus rose to $52.3bn in July:
“I definitely think we could see concern over the surplus...
"We have a long way to go before we really see a decline in China’s overcapacity.”