Powerful storm hits Taiwan, millions without power, 4 dead

A powerful typhoon battered Taiwan on Saturday with strong wind and torrential rain, cutting power to nearly three million households and killing four people. 

PHOTO: AFP

AUG 8, 20152:08 PM

[TAIPEI] A powerful typhoon battered Taiwan on Saturday with strong wind and torrential rain, cutting power to nearly three million households and killing four people.

By mid-day, as the eye of Typhoon Soudelor passed Taiwan, four people were missing and 64 injured and hundreds of flights delayed or cancelled, authorities said. More than 7,500 people have been evacuated.

The storm made landfall early in the morning on the island's east-coast counties of Yilan and Hualien, bringing up to 1,000 mm of rain in mountainous northeastern areas and wind gusting up to 200 kph (124 mph). "This is one of the worst typhoons I have ever seen," said a sewage station engineer surnamed Jiang, who was inspecting pumping stations early on Saturday. "My car was shaking when I was driving. There are too many trees down, and I even saw six downed power poles." A rescue worker was killed by a passing car as he tried to clear downed branches from a road and a foreign worker died when he was hit by a falling sign, authorities said.

As the storm approached over the Pacific Ocean on Friday, a child and an adult were killed in rough seas off the coast of Yilan.

In the capital, Taipei, large steel sheets and rods were blown off a half-constructed stadium and city authorities shut down a growing number of bus and subway services.

Authorities issued flood and mudslide alerts and television showed a fallen wind turbine, mudslides trapping people, and flood nearly covering the roofs of cars in some areas.

More rain and wind has been forecast for late Saturday and Sunday.

Taiwan Power, the island's main power company, said 2.94 million households had lost power. While some supplies had been restored, two million households were still without power on Saturday afternoon, the company said.

Authorities began evacuating people as the storm approached and the island's military put tens of thousands of troops and thousands of vehicles on stand-by for rescue operations.

The Tropical Storm Risk website said the typhoon was a category 2 storm on Saturday, on a scale of 1 to 5, and could weaken to a category 1 as it leaves Taiwan.

Soudelor has drawn comparisons with 2009's Typhoon Morakot, which cut a wide path of destruction over southern Taiwan, leaving about 700 people dead or missing and causing US$3 billion worth of damage.

Soudelor is expected to cross the Taiwan Strait and hit the Chinese province of Fujian late on Saturday. Authorities there have evacuated people on the coast.

Typhoons are common at this time of year in the South China Sea and Pacific, picking up strength from warm waters before losing strength over land.

REUTERS

    

Bond traders brace for more turbulence in short-term treasuries

Dennis Lockhart, president of the Federal Reserve Bank of Atlanta, speaks during a Bloomberg interview in New York, US, on Monday, June 3, 2013.

PHOTO: ST FILE

AUG 8, 201512:54 PM

[NEW YORK] What a difference a week makes for bond traders betting on when the Federal Reserve will raise interest rates.

The probability of an increase in September surged as high as 58 per cent on Friday from 38 per cent on Monday, after data showing sustained labor-market growth in July and comments from Atlanta Fed president Dennis Lockhart suggesting US economic strength may merit a rate increase next month. After yields on Treasury two-year notes rose the most in six weeks, traders are paying more to protect against price swings in those securities, which are susceptible to changes in the outlook for Fed policy.

"We're going to continue to be extremely sensitive to each data point we get, and each bit of Fed speak," said Michael Lorizio, a Boston-based fixed income trader at Manulife Asset Management, which oversees US$20 billion. "It's almost an exaggerated focus."

The two-year yield rose six basis points this week in New York, or 0.06 percentage point, to 0.72 per cent, according to Bloomberg Bond Trader prices, the largest weekly increase since June. The rate-increase forecasts are based on the assumption that the Fed funds rate will average 0.375 per cent after the first increase.

Traders are paying 6.2 per cent more to protect against swings in two-year notes than they were a week ago, according to options prices. While the Labor Department's July employment report is out of the way, economic data to be released next week may further change views on the timing of the Fed's first rate increase since 2006.

One potential catalyst for short-term Treasury swings is retail sales data due to be released Aug 13. Economists surveyed by Bloomberg predict sales rose 0.6 per cent in July from the previous month. A strong report may give the Fed more ammunition for a September increase.

Strategist George Goncalves said he is skeptical about a September increase, but that a robust report could sway him.

"If retail sales are strong and inflation turns a corner, I could change my view," said Mr Goncalves, New York-based head of interest-rate research for Nomura Holdings.

Mr Lockhart, who's a voting member of the Fed's policy-setting committee, will speak on Aug 10 at a Fed Bank of Atlanta conference and at the Atlanta Press Club. He could walk back or confirm the view he expressed last week that the US economy is ready to support higher borrowing costs.

"The move up in yields was fully a Lockhart trade," said David Keeble, the New York-based head of fixed-income strategy at Credit Agricole.

Traders will also be trying to determine whether the Fed may be delayed by the latest drop in oil prices. Falling energy prices have suppressed a bond-market inflation forecast known as the break-even rate. That has helped long-term Treasury prices, which are more sensitive to inflation and economic growth.

"If we see financial conditions worsen and the global backdrop is bad, absolutely, they'll wait" to raise interest rates, said Mr Goncalves. "People are on pins and needles, and really trying to take stock in the lead-up to the September meeting."

BLOOMBERG

    

China stock market rout shakes up shadow banks

People doing taiji in Shanghai's Bund area. The reversal of fortunes has helped cull riskier lenders in China's online market, which was surging before the equity rout wiped out more than US$4 trillion (S$5.5 trillion). President Xi Jinping has already taken steps to curb traditional forms of unregulated funding.PHOTO: BLOOMBERG

PUBLISHED

8 HOURS AGO

Loans from unregulated lenders for equity buys have plunged 61% from this year's peak

BEIJING • China has been struggling to tame its shadow banks for years. Now, a stock market crash has hamstrung some of the fastest-growing ones in a matter of weeks. Loans from sources such as online lenders for equity purchases have plunged by at least 700 billion yuan (S$156 billion), a drop of 61 per cent from this year's peak, after the authorities banned them from funding stock buying last month, according to a Bloomberg survey conducted last month.

Peer-to- peer Internet lending for the purchases had more than tripled to eight billion yuan in the second quarter, data from research firm Yingcan Group shows.

The reversal has helped cull riskier lenders in China's online market, which was surging before the equity rout wiped out more than US$4 trillion (S$5.5 trillion).

President Xi Jinping has already curbed traditional forms of unregulated funding - such as trust loans - as part of his effort to wean the economy off debt-fuelled growth after corporate defaults mounted.

"The new regulations are making the industry more disciplined and transparent," said Mr Wei Hou, a senior equity analyst for Chinese banks at Sanford C. Bernstein & Co. "There may be short-term pain of a number of small players closing down. But it's good for the industry in the long term."

While peer-to-peer lending was pioneered in the United States by companies such as Lending Club, China is where it is really taking off. Origination of such loans will exceed US$332 billion by 2017, according to Maybank Kim Eng Securities. That compares with only US$6 billion in the US last year.

The China Securities Regulatory Commission said on July 12 that it would stop online sites from handing out loans for share purchases. Internet finance firms will need approval from financial as well as cyberspace regulators, the People's Bank of China said on July 18.

Zhongxin Quick Loans, a lender to companies and individuals in the eastern province of Jiangsu, said last month that it is liquidating assets because borrowers cannot repay loans and investors are demanding their money back. Bangcheng Financial, another online lender based in the southern province of Fujian, said it is restricting redemptions for investors who offer loans on its site after too many tried to cash out.

"Chinese regulators realised how much risk stock financing had brought," said Mr Zhu Mingchun, founder of Yingcan Group in Shanghai. "P2P sites that focused on stock finance will change their focus back to smaller company funding - what the government originally wanted such lending to serve."

China's government-backed banks are limited by interest rate controls and pressure to lend to large state-owned enterprises, prompting expansion of shadow lending that Moody's Investors Service estimates reached 41 trillion yuan last year. That is 65 per cent of the nation's economic output, up from 56 per cent a year earlier.

"There is little control in place to ensure quality of lenders and borrowers on some of these platforms," said Mr Barry Lau from Adamas Asset Management HK, which manages about US$630 million.

While the shadow-banking industry can help to channel funds to productive businesses, the increase in new kinds of financing tied to the stock market shows the difficulty regulators have in managing risks, said Mr Stephen Schwartz, a senior vice-president of credit policy at Moody's.

Chinese shadow banks' push into Internet finance comes as the slumping real estate industry demands less cash.

"Funding demand for the property sector and local government financing vehicles has come down because fixed asset investments slowed," said Mr Liao Qiang, a banking analyst at Standard & Poor's in Beijing.

BLOOMBERG

China pledges $2.7 million to curb poaching in Zimbabwe

Elephants graze inside Zimbabwe's Hwange National Park.REUTERS

PUBLISHED

AUG 6, 2015, 11:03 PM SGT

HARARE (AFP) - China, which is accused of fuelling the trade in elephant ivory and rhino horn, on Thursday pledged equipment worth US$2 million (S$2.7 million) to curb poaching in Zimbabwe.

The funding came after Zimbabwe's wildlife became the focus of global attention with the killing of Cecil the lion, a well-known animal among tourists, by an American trophy hunter.

"By providing equipment for wildlife protection, China is willing to cooperate with our Zimbabwe friends to ensure that all of Africa's wildlife can survive," Chinese ambassador Lin Lin said at a news conference in Harare.

The equipment will include all-terrain vehicles, tents, telescopes, mobile radio sets and GPS tracking devices, Lin said.

China attracted criticism last month after importing 24 elephant calves from Zimbabwe.

Zimbabwean authorities have defended the sale as a measure to raise funds for conservation, saying the country has too many elephants.

Poaching is a major problem in Zimbabwe with the parks and wildlife authority operating on a scant budget and often appealing for donations.

Last year, poachers killed scores of elephants after poisoning the environs of their watering holes in Hwange national park.

Early in July, Cecil the lion was killed outside Hwange park by US trophy hunter Walter Palmer using a bow and arrow.

The hunt provoked worldwide outrage after it emerged that Cecil was a well-known attraction at the park and was wearing a tracking collar as part of an Oxford University research project.

Rhino horn is prized in China for its supposed medicinal properties, while elephant ivory is highly valued in artworks or jewellery.

Israel makes veiled threats against Iranian nuclear scientists

Israeli Defence Minister Moshe Yaalon (above) issued a veiled threat against Iranian nuclear experts.AFP

PUBLISHED

11 HOURS AGO

BERLIN (AFP) - Israeli Defence Minister Moshe Yaalon issued a veiled threat against Iranian nuclear experts saying the Jewish state had a right to defend itself and that he was not "responsible for their lives".

In an interview to German weekly Der Spiegel due to appear on Saturday, Yaalon said: "Iran's nuclear ambitions must be stopped in one way or another.

"We would like this to be done through accords or sanctions," he said.

"But finally, Israel must be in a position to defend itself."

Asked specifically about targeting Iranian experts or staging acts of sabotage, he said: "I am not responsible for the lives of the Iranian scientists."

Several Iranian experts have been assassinated and there has been a hacking attack, both blamed by Teheran on Israel and the United States.

Iran and the United States, along with Britain, China, France, Germany and Russia, recently struck a deal meant to ensure Iran's nuclear programme could not produce a bomb.

The deal, that rewards Iran with a lifting of crippling sanctions, must be reviewed and approved by lawmakers in the US and Iran before it can be implemented.

Yaalon said if Iran did not respect its engagements, Israel could stage air strikes and once again called the July 14 deal between Teheran and the world powers a "historic error".

Migrant walks Channel Tunnel in bid to reach Britain from France

Migrants walk in the direction of the Eurotunnel terminal on Aug 6, 2015.PHOTO: AFP

PUBLISHED

AUG 7, 2015, 5:27 PM SGT

LONDON (REUTERS) - A Sudanese migrant walked the 50km Channel Tunnel from France, dodging high-speed trains and evading security guards before he was stopped just short of the British entrance and arrested.

Thousands of migrants from Africa and the Middle East have been trying to flee makeshift camps in the French port of Calais and enter Britain illegally by jumping onto lorries and hiding on trains, disrupting cross-Channel freight and passenger traffic.

British police said Abdul Rahman Haroun, 40, was found close to the British entrance to the tunnel near Folkestone in south-east England on Tuesday evening.

Police said he had been charged with "causing an obstruction to an engine or carriageway using the railway", and would appear in court.

British Prime Minister David Cameron said last month that he was going to take action to resolve the crisis, including beefing up security at the terminal in Calais, but he warned there was no quick fix.

The government said on Friday it was working with the French government and operator Eurotunnel to resolve the crisis. Eurotunnel did not immediately respond to requests for comment on the arrest.

The government said more than 39,000 attempts to cross the Channel illegally were prevented in 2014 to 2015, more than double the previous year.

Iran N-deal: Obama suffers setback

PUBLISHED

8 HOURS AGO

2 influential Jewish lawmakers in President's party to oppose pact amid strong lobbying

WASHINGTON • United States President Barack Obama's hopes of preserving the nuclear deal between Iran and world powers were dealt a setback when one of the top Democrats in the US Senate said he would oppose the agreement.

Senator Chuck Schumer's opposition, announced in a lengthy statement on Thursday, could pave the way for more Democrats to come out against the nuclear pact announced on July 1 between the US, five other world powers and Iran.

The New York senator is among the most influential Jewish lawmakers in the US. He was the first Senate Democrat to announce his opposition to the agreement.

Another influential Jewish lawmaker, US Representative Eliot Engel, the top Democrat on the House of Representatives Foreign Affairs Committee, also said on Thursday he would oppose the nuclear pact.

Israeli Prime Minister Benjamin Netanyahu has been pushing lawmakers to oppose the nuclear agreement, which he considers a threat to his country's survival. Some pro-Israel groups have also been spending millions of dollars on an advertising campaign to push members of Congress to vote "no".

DISAGREEMENT

While I completely respect everybody's individual right to make a choice, I obviously disagree with the choice made.

US SECRETARY OF STATE JOHN KERRY, on the two lawmakers' opposition to the deal

Mr Obama, in a combative speech on Wednesday, said abandoning the agreement would open up the prospect of war.

At a news conference on a visit to the Vietnamese capital Hanoi, US Secretary of State John Kerry, who negotiated the deal on the US side, said he respected Mr Schumer and Mr Engel but added that "rejection is not a policy for the future".

"It does not offer any alternative and many people in arms control and others have actually pointed that out. While I completely respect everybody's individual right to make a choice, I obviously disagree with the choice made," he said.

The US Congress has until Sept 17 to consider a resolution of disapproval of the Iran deal, which would eliminate Mr Obama's ability to waive all sanctions on Iran imposed by the US Congress, a key component of the agreement. Lawmakers will begin debating when they return from their August recess on Sept 8.

Mr Schumer insisted he was not influenced by party or politics and had not been pressured.

Mr Obama has promised a veto if the resolution is passed by the House and Senate.

Republicans would need at least 13 Democrats in the Senate and 44 in the House to vote against Mr Obama to muster the two-thirds majorities in both chambers needed to override a veto. So, while Thursday's announcements are a blow to the President, opponents of the deal still face an uphill battle to enact a disapproval resolution.

Several Democrats in the House and Senate have already come out in favour of the nuclear deal, including Mrs Nancy Pelosi, the House Democratic leader. Mr Schumer's colleague from New York, US Senator Kirsten Gillibrand, announced her support on Thursday.

Mr Schumer said lawmakers would come to their own conclusions but he would try to persuade other senators to vote against the Iran deal.

REUTERS

Tsipras seeks EU help to tackle influx of immigrants

A dinghy overcrowded with Afghan immigrants approaching the Greek island of Lesbos after crossing a part of the Aegean Sea between Turkey and Greece on Thursday. According to the United Nations refugee agency, 50,000 immigrants arrived in Greece in the last month alone.PHOTO: REUTERS

PUBLISHED

8 HOURS AGO

ATHENS • Greece's infrastructure cannot handle the thousands of immigrants landing on its shores from places like war-torn Syria and Afghanistan and the country needs European Union help, Prime Minister Alexis Tsipras said yesterday.

"Now is the time to see if the EU is the EU of solidarity or an EU that has everyone trying to protect their borders," he said after a meeting with ministers dealing with the influx. The United Nations refugee agency, or UNHCR, earlier called on Greece to take control of the "total chaos" on the Mediterranean islands, where thousands of immigrants have landed.

EU member states must also do more to share the burden of Greece, where 50,000 people arrived in the last month alone, said Mr Vincent Cochetel, UNHCR director for Europe, after visiting the Greek islands of Lesbos, Kos and Chios.

Greece and Italy have been on the front line of a huge wave of immigrants seeking safety and a better future in Europe.

But Greece's economy is falling into recession again after having only just recovered from six years of depression brought on by the country's debt crisis.

It is currently negotiating with the EU and the International Monetary Fund for a third bailout of as much as €86 billion (S$130 billion) to stave off a financial collapse.

With that background, it cannot handle the increasing pressure from thousands of refugees fleeing from war and poverty.

According to Reuters, within just one hour on Thursday, two boatloads of refugees landed on the island of Lesbos, with one carrying about 40 Syrians, and the other the same number of Afghans.

The EU has sought to share the burden of the refugees across its countries, but the response has been mixed.

Britain has said it will not participate, but is currently struggling with its own crisis as thousands of immigrants seek to enter via the Channel Tunnel.

Hungary is preparing to build a fence along its border, where immigrants from the east seek to enter.

REUTERS

Putin orders Western food destroyed

A truck dumping boxes of cheese outside the southern Russian city of Belgorod on Thursday. Prime Minister Vladimir Putin's order to destroy the food has caused a public outcry in Russia where many are struggling to feed themselves due to food price inflation.PHOTO: AGENCE FRANCE-PRESSE

PUBLISHED

7 HOURS AGO

Goods breached import embargo, which was in retaliation for sanctions over Ukraine crisis

MOSCOW • As poverty rates soar and memories remain of famine during Soviet times, Russian officials have steamrolled tonnes of cheese, fruit and vegetables in a controversial drive to destroy Western food smuggled into the crisis-hit country.

President Vladimir Putin has provoked outrage with his order to trash all food that breaches a year-old embargo on imports imposed in retaliation to sanctions by the United States, European Union and others over the Ukraine crisis.

Even some Kremlin allies are expressing shock at the idea of "food crematoria", while one Russian Orthodox priest has denounced the campaign, which officially began on Thursday, as sinful.

Communist Party leader Gennady Zyuganov, who normally toes the Kremlin line, said the move was "extreme" and proposed sending the food to orphanages and to the separatist pro-Russian regions of eastern Ukraine.

However, the authorities consider illegal imports "a security threat" and Russian television showed truckloads of round bright orange cheeses dumped on a patch of wasteland and then crushed with a steamroller in the Belgorod region bordering Ukraine.

AN UNCIVILISED ACT

This is no ordinary measure. This is a display of barbarity, a challenge to society, a refusal to see the ethical side where it is most important.

VEDOMOSTI EDITORIAL, on President Vladimir Putin's move to destroy the food

Even before the official start, zealous workers threw boxes of European bacon into an incinerator.

Many Russians say the government has lost sight of the everyday struggles faced by ordinary citizens.

"This is no ordinary measure. This is a display of barbarity, a challenge to society, a refusal to see the ethical side where it is most important," Vedomosti business daily wrote in a front-page editorial.

More than 285,000 people have backed an online petition on Change.org, an international website that hosts campaigns, calling on President Putin to revoke the decision and hand the food to people in need.

"Sanctions have led to a major rise in food prices on Russian shelves. Russian pensioners, veterans, large families, the disabled and other needy social groups were forced to greatly restrict their diets, right up to starvation," the petition said. "If you can just eat these products, why destroy it?"

The Russian Orthodox Church did not look kindly upon the destruction of food, either. "In essence, this is a crazy, stupid, vile idea," Father Alexi Uminsky, a Moscow parish priest, wrote on the Orthodox site Pravmir.ru. "There are lots of people in our country who could benefit greatly from these goods."

With annual food price inflation running at more than 20 per cent, public indignation has been deepened by Russian media reports that the Agriculture Ministry was tendering to buy "mobile food crematoria" to speed up the destruction.

By the end of Thursday, a total of 319 tonnes of food was destroyed, including some meats from Italy which were burned in a garbage incinerator at Saint Petersburg's Pulkovo airport.

Two truckloads of European tomatoes and three of nectarines and peaches were smashed with a tractor and bulldozer in the Smolensk region after they arrived with fake documents, the food safety agency Rosselkhoznadzor said.

One truck driver carrying a cargo of tomatoes turned his vehicle around and made a getaway back into Belarus to prevent them from being destroyed, the agency said.

Kremlin spokesman Dmitry Peskov said the food is "pure contraband", while Russia's Agriculture Minister Alexander Tkachev said the destruction was necessary as the food was of "dubious quality".

REUTERS, AGENCE FRANCE-PRESSE, BLOOMBERG

24 million watched US presidential debate: Fox

Donald Trump (right) and Scott Walker arrive on stage for the start of the Republican debate.AFP

PUBLISHED

9 HOURS AGO

WASHINGTON (AFP) - A staggering 24 million viewers tuned in to the first major Republican debate of the US presidential election cycle, the highest-rated non-sports telecast in the history of cable television, Fox News reported Friday.

“Fox had 24 million viewers last night. That is an absolutely monster number,” tweeted Fox media commentator Howard Kurtz.

The viewership of the prime-time 9pm to 11pm Anchordebate, in which frontrunner billionaire Donald Trump squared off against nine of his top Republican challengers for the nomination, is by far the highest rating of any presidential primary debate.

The viewership of the prime-time 9pm to 11pm debate, in which frontrunner billionaire Donald Trump squared off against nine of his top Republican challengers for the nomination, is by far the highest rating of any presidential primary debate.

Fox, citing figures from ratings monitor Nielsen Media Research, also said the telecast drew 7.9 million viewers in the 25-54 age range, the key advertising demographic.

Numbers were also huge for the second-tier debate which took place at 5pm on Thursday and featured the seven low-polling candidates who failed to make the cut for the prime time event.

Some 6.1 million people watched the preliminary debate, Fox said, citing Nielsen.

The debate night appears to have been a multi-platform smash.

Facebook, which co-sponsored the showdowns, said 7.5 million people in the United States made 20 million debate-related interactions on Facebook, including likes, posts, comments and shares, the social media giant said Friday.

Twitter reported that tweets about the two debates were viewed a whopping 1.1 billion times.

Kurtz argued that the sky-high viewership was a combination of  “huge public interest, Trump, August lull and riveting television”.

The results are not just good news for Fox.

The Republicans will host at least eight more debates as the party whittles down its broad field and determines its flagbearer to go up against likely Democratic nominee Hillary Clinton.

The next Republican debate is scheduled for Sept 16 in California and broadcast on CNN.

The debut Democratic Party debate is scheduled for Oct 13 in Nevada, also on CNN.

US Secretary of State Kerry says TPP trade pact must stay on track

PUBLISHED

AUG 7, 2015, 12:13 PM SGT

HANOI (REUTERS)- United States Secretary of State John Kerry expressed the need to forge ahead to "finish the job" on an ambitious Trans-Pacific Partnership (TPP) during a meeting with Vietnam's president on Friday, a week after lengthy talks in Hawaii ended with no deal.

Pacific Rim trade ministers failed to strike an agreement last week to free up trade between a dozen nations after disputes on issues ranging from autos and dairy trade to monopoly periods for next-generation drugs.

"One of the very important things now is for us to be able to stay where we are on the TPP negotiations, not to slide backwards, but to finish that job in which Vietnam is very much an important contributor to," Kerry told President Truong Tan Sang in Hanoi.

The Pacific pact is a "mega regional" accord set to cover 12 countries with a combined GDP of US$28 trillion (S$38 trillion), among them Australia, Japan and the United States. In Asia, it also includes Vietnam, Malaysia, Singapore and Brunei.

The US-inspired TPP would connect those economies by cutting trade barriers and harmonising standards covering two-fifths of the world economy and a third of global trade.

TPP trade ministers discussing the pact, which would stretch from Japan to Chile, have said an agreement is within reach, despite last week's failure to conclude.

Vietnam's export-dominated economy is widely seen as one of the biggest potential beneficiaries of the TPP because of its vast commodities resources, cheap labour and growing manufacturing clout, especially in textiles, footwear and cellphones.

Speaking in Singapore on Monday, Kerry said the talks were near completion and called the TPP "a tangible means of demonstrating America's firm and enduring commitment to the security and prosperity of the Asia-Pacific."

The White House said on Monday US negotiators were working to find common ground with other countries, but also wanted the best deal for Americans and one that would meet President Barack Obama's criteria.

China's July trade surplus down 10% to 263b yuan

China turned in a dismal foreign trade performance in July, with its trade surplus falling 10 per cent on the year to around 263.0 billion yuan (S$58.6 billion), customs said on Saturday, which could spell more worry for the world's second largest economy. 

PHOTO: AFP

AUG 8, 201510:40 AM

[SHANGHAI] China turned in a dismal foreign trade performance in July, with its trade surplus falling 10 per cent on the year to around 263.0 billion yuan (S$58.6 billion), customs said on Saturday, which could spell more worry for the world's second largest economy.

Exports plunged 8.9 per cent year-on-year to 1.19 trillion yuan, while imports dropped 8.6 per cent to 930.2 billion yuan, it said in a statement on its website.

Exports are a key driver of China's economic growth, while falling imports can indicate weak domestic demand.

A stronger yuan currency, which makes China's exports more expensive, has hurt the country's overseas sales, analysts say.

"The yuan has been stronger against the euro, and it's hurting Chinese exports to Europe," Li Miaoxian, a Beijing-based economist at Bocom International Holdings Co., was quoted by Bloomberg News as saying.

China's economy, a key driver of global growth, expanded 7.4 per cent last year, its weakest since 1990, and has slowed further this year, growing 7.0 per cent in each of the first two quarters. The government has targeted annual economic growth of around 7.0 per cent for all of 2015.

The People's Bank of China, the central bank, in June announced its latest cut in interest rates, marking the fourth such move since November to boost lending as a driver for the economy.

AFP