China’s export growth collapsed and imports and new yuan loans trailed esti­mates in July, adding to signs the global economy is weakening and raising the odds the government will step up meas­ures to support expansion.

China’s export growth was close to zero in July, raising the odds the government will take more aggressive measures to support growth after industrial output and retail sales data missed esti­mates.
Outbound shipments increased 1 per­cent from a year earlier, the cus­toms bureau said in Beijing, after an 11,3 per­cent rise in June.

New local-currency lending was 540,1 billion yuan (US$85 billion), the central bank said, lower than all         30 estimates in a Bloomberg News sur­vey, compared with 919,8 billion yuan in June.
Stocks slid as the data boosted evi­dence that China’s interest-rate cuts and accelerated approval of investment proj­ects have yet to propel growth, after a report yesterday showed industrial out­put rose the least since 2009.

The slowdown intensifies risks of a sev­enth quarter of deceleration in the world’s second-largest economy.
“Monetary policy easing has to be more aggressive in the remainder of the year,” said Liu Li-Gang, Hong Kong-based head of Greater China Economics at Australia and New Zealand Banking Group Ltd.

He said there’s a risk of a “hard land­ing” and the government may lower banks’ reserve requirements.
The MSCI All-Country World Index (SHCOMP) of global stocks fell 0,3 per­cent on Friday in London.
China’s Shanghai Composite Index dropped 0,2 percent, the first decline in six days.
Separate reports showed industrial output growth unexpectedly slowed last month to 9,2 percent from a year earlier and retail sales rose 13,1 percent, trailing analysts’ forecasts.

New yuan lending in July compared with the median estimate of 700 billion yuan in a Bloomberg survey.
It was the lowest monthly figure since September 2011.
Growth in M2, the broadest measure of money supply, was 13,9 percent last month, compared with the median fore­cast for a 13,8 percent gain.

The growth in July exports compared with the 8 percent median estimate in a Bloomberg News survey.
Imports rose 4,7 percent, versus the survey estimate for 7 percent and a 6,3 percent increase in June.
The trade surplus was US$25,1 billion in July compared with US$31,5 billion a year earlier. The median projection was US$35,1 billion.

Excluding distortions caused by the timing of the Lunar New Year holiday, it was the worst export growth since 2009. The figures put China further at risk of missing its 10 percent goal of trade expansion for the year.
China is still “confident” of achieving the target, Gao Hucheng, a vice com­merce minister, said at a briefing on Fri­day.

China’s sales to European Union coun­tries fell 16,2 percent last month and growth in US exports slowed to 0,6 per­cent from 10,6 percent in June, customs data showed.

The odds the government will “greatly step up” policy easing or stimulus are “surely on the rise,” Lu Ting, head of Greater China Economics at Bank of America Corp in Hong Kong, said in a note today.
The central bank may cut banks’ reserve requirements “soon” and another interest-rate reduction is “in the pipeline,” Lu said, after two so far this year.

Barclays plc yesterday cut its estimate for third-quarter growth to 7,7 percent from 8,2 percent while Deutsche Bank AG lowered its forecast to 7,5 percent from 7,9 percent.

China’s central bank halted gains in the yuan in the first half of the year, providing some help to exporters amid deteriorat­ing global demand.
The currency has fallen 1 percent against the US dollar this year.
The yuan was little changed against the dollar today at 6,3600, according to the China Foreign Exchange Trade System.

Li & Fung Ltd, the world’s largest sup­plier of clothes and toys to retailers, plunged in Hong Kong trading by the most since listing in 1992 after slow­downs in the US and Europe caused a slump in first-half operating profit.

The company, whose customers include Wal-Mart Stores Inc and Target Corp, sells goods that are made in China.
Separately on Friday, the Ministry of Finance said fiscal spending rose  37 per­cent in July from a year earlier, while fis­cal revenue rose 8,2 percent.
Elsewhere in the Asia-Pacific region, Singapore said its economy shrank an annualised 0,7 percent last quarter, less than the preliminary reading of a                 1,1 percent contraction.

Hong Kong said gross domestic prod­uct expanded 1,1 percent in the second quarter from a year earlier, compared with the median estimate for a             1,2 percent rise.

German inflation unexpectedly slowed in July to 1,9 percent from 2 percent in June.
French industrial production stag­nated in June, the latest sign that the euro area’s second-largest economy may be heading for its first recession in three years.
The Russian central bank refrained from raising borrowing costs for an eighth month, highlighting “significant” inflation risks from a weaker harvest and higher interbank rates that constrain lending growth.

Brazil’s unemployment rate probably fell to 5,7 percent in June, the third monthly decline, based on the median estimate of 35 economists.
Canada’s jobless rate may have been unchanged at 7,2 percent in July.
Exports present the biggest uncertainty to China’s outlook, Song Guoqing, an adviser to the People’s Bank of China, said last month.

He estimated economic growth may slow to 7,4 percent this quarter.
In its second-quarter monetary policy report released on August 2, the central bank said the “primary risk for the global econ­omy is still the European debt crisis,” and that the possibility of Europe “trig­gering a double dip in the global econ­omy can’t be ruled out.” — Bloomberg.