China foreign trade decline widens in August

However, trade with the United States and the Association of Southeast Asian Nations, China's second- and third-largest trade partners, managed to climb by 2 percent and 0.4 percent to reach 2.22 trillion yuan and 1.86 trillion yuan respectively, driven by increased exports to those countries.

Exports by private firms increased 3.4 percent year on year in the Jan-Aug period to 4.02 trillion yuan, while imports declined by 12.9 percent to 1.69 trillion yuan.

In contrast, State-owned enterprises saw their exports drop by 5.1 percent year on year to 975.35 billion yuan, and imports plunged by 17.9 percent to 1.68 trillion yuan.

China's currency fell sharply in value after the central bank decided to improve its "central parity system" last month to better reflect market development in the exchange rate between the Chinese yuan and the US dollar, citing a strong dollar and sharp appreciation in the RMB real effective exchange rate.

The stimulus effects of the yuan's depreciation on exports are not yet evident as it will take time for prices to adjust, said Li Hui Yong, an analyst with Shenwan Hongyuan Securities.

Weak global demand and falling commodity and primary raw material prices dampened import growth, according to Li.

The leading export index stood at 34 in August, down 0.1 from July and marking a sixth consecutive month of declines. Exports in the last quarter will continue to face heavy pressure, according to the GAC.

China's cabinet issued guidelines in July urging governments at all levels to implement measures to foster imports and exports as the country strives to open its markets and upgrade the economy.

China will support imports by reducing tariffs on popular consumer goods, opening more duty-free shops at ports and expanding the variety of duty-free products, according to the State Council.

The guidelines also called on ministries including the GAC, the Ministry of Commerce and the State Administration of Foreign Exchange to facilitate foreign trade in free trade zones and offer tax refunds for exports.

Governments at all levels should speed up implementation of related measures, and more supportive fiscal and monetary polices are necessary to buoy the economy, Li said.