China’s exports grew at a marginal 1% in July from a year earlier to USD176.9 billion, the General Administration of Customs (GAS) said, down from the 11.3% gain in June. Imports rose 4.7% year-on-year to USD151.8 billion last month, compared with the June increase of 6.3%, indicating slowing domestic demand. The trade surplus narrowed to USD25.1 billion last month from USD31.7 billion in June. That marked the second straight month that both exports and imports slowed. Exports to Europe fell by 3.6% to USD192.4 billion in the first seven months of the year from the same period last year, extending the 0.8% decline in the first half of the year. Shipments to the United States rose 11.4% on year in the seven months through July to USD195.4 billion. “With the export sector losing speed faster than expected, the government’s current investment stimulus plan looks woefully inadequate,” IHS Global Insight Economists Ren Xianfang and Alistair Thornton wrote in a research note. Zhang Zhiwei, Economist with Nomura International (HK), expects exports to remain weak in the coming months as suggested by flat growth in imported parts for re-export purposes in July. A slowdown in consumer price inflation in July for the fourth straight month is seen as giving authorities more room to further loosen monetary policy in a bid to boost the slumping economy. The consumer price index rose 1.8% last month year-on-year, easing to the lowest level since January 2010. The government announced that industrial production and retail sales both slowed in July. Fixed-asset investment (FAI) rose 20.4% on year in the first seven months of the year, a rather weak performance by Chinese standards. The lower-than-expected increase in investment was in part due to a further cooling in China’s property market. In the first seven months, bilateral trade between China and the European Union fell 0.9% from a year earlier to USD315.7 billion. In comparison, deals with the United States jumped 10.5% to USD271.4 billion. China’s exports to the EU dropped by 16.2% in July from a year earlier, while exports to the U.S. edged up by 0.56% year-on-year in July. The U.S. replaced the EU in the first half of this year as China’s biggest export market.