Overseas shipments grew 17.6 percent from a year earlier, the slowest pace in four months, after gaining 28.1 percent in May, the customs bureau said on its Web site today. That was less than the lowest estimate of 23 economists surveyed by Bloomberg News.
The yuan's 6.7 percent jump against the dollar this year has helped restrain inflation at the cost of squeezing exporters' competitiveness just as world demand slows. Limiting gains to bolster economic growth would risk stoking trade tensions after International Monetary Fund Managing Director Dominique Strauss-Kahn said yesterday that the yuan is ``substantially undervalued.''
The yuan traded at 6.8439 versus the dollar as of 4:31 p.m. in Shanghai, close to the highest since a peg to the U.S. currency was scrapped in 2005.
China's trade surplus narrowed 20.6 percent to $21.4 billion from a year earlier as growth slowed in shipments to the U.S. and the European Union. Imports climbed 31 percent in June, after a 40 percent increase in May.
Textile export growth slowed to 23 percent from 25 percent and shipments of garments fell from a year earlier. Tax rebates on textile and garment exports may increase this month to help companies cope with currency gains and weakening demand, the China Securities Journal reported yesterday.
The Bank of China, the nation's largest foreign-exchange trader, said in a report yesterday that the yuan's gains will slow in the fourth quarter as policy makers rely more on interest rates and less on currency appreciation to cool prices.
China's economy has slowed each quarter since expanding 11.9 percent, the fastest pace in 12 years, between April and June last year. Second-quarter gross domestic product is due to be announced July 17 after a 10.6 percent expansion in the first three months.
Inflation slowed to 7.7 percent in May from an almost 12- year high of 8.5 percent in April as food-price gains cooled. A pork shortage that pushed up consumer prices from last year is easing.
Export growth in the first six months slowed to 21.9 percent from 25.7 percent for all of last year. The weaker performance ``is closely linked to the global economic slowdown, led by the U.S. economy,'' Wang Tao, a Beijing-based economist with UBS AG, said in a report.
The yuan has gained 21 percent against the dollar since a fixed exchange rate was scrapped in 2005. It has jumped 15 percent against the yen and fallen 7 percent versus the euro. This year, the Chinese currency is the best performer versus the dollar in Asia.
China was criticized by Group of Eight leaders in Japan this week for contributing to trade imbalances. In language that French President Nicolas Sarkozy said was aimed at China, the G- 8 called for a ``necessary adjustment'' in exchange rates ``in some emerging economies with large and growing current-account surpluses.''
For the first half, China's trade surplus narrowed 11.8 percent from a year earlier to $99 billion as imports rose 30.6 percent.
Across Asia, China's export growth compares with 3.7 percent in Japan, 13 percent in India, and 17 percent in South Korea, according to those nation's most recent monthly figures.
Exports to the U.S. rose 8.9 percent in the first half from a year earlier, after gaining 9.1 percent in the first five months. Shipments to the European Union climbed 27 percent after rising 27.4 percent.
May's surge in overseas shipments may have been because a shortened holiday added three working days to the month compared with a year earlier.