China Exports Fell 0.7%, Imports Down 6.2% In September

China's already badly dented economy took a huge knock in September with its imports and exports both declining as the US-China trade war continued to batter its sagging economy.

The worse-than-expected outcomes saw exports drop 3.2 percent year-on-year, while imports plummeted 8.5% percent year-on-year in dollar terms, according to the General Administration of Customs (GAC). The agency admitted China's trade war with the U.S. has affected its export and import activity.

In yuan terms, China’s exports in September came in 0.7 percent lower year-on-year while imports dropped 6.2 percent during the same period, according to Reuters. It will take some time for China's exports to recover despite hints of a new trade deal last week.

Economists polled by Reuters expected Chinese exports to decline by 2.8 percent and imports to give-up 6.0 percent in September compared to a year ago. China's trade surplus for September came to $36.65 billion compared to the $34.75 billion expected by analysts.

The unexpected drop in China’s August exports in U.S. dollars by 1 percent year-over-year was the biggest fall since June as shipments to the U.S. decelerated sharply. Chinese imports, meanwhile, dropped 5.6 percent in the same period.

Chinese exports to the U.S. in August plummeted 16 percent, a clear sign Trump's trade war is hurting its trade income. The trade surplus for August, however, stood at $34.83 billion.

“The mini U.S.-China trade deal reached on Friday doesn’t alter the outlook significantly,” wrote Martin Lynge Rasmussen, China economist at consultancy Capital Economics, in a note do investors.

“Looking ahead, exports look set to remain subdued in the coming quarters. Meanwhile, import growth has slowed sharply in recent quarters and now looks unusually weak relative to economic growth. A partial rebound in headline import growth is therefore likely in the near term.”

China's economy, the world's second largest, is growing at it slowest pace since the start of the 1990s. Last August, China reported the slowest growth in its industrial output grow since 2002.

"The slowdown in China is becoming quite significant," said Tommy Wu, senior Asia economist at Oxford Economics.

"Both the weakening in the domestic economy and deteriorating external environment, including both a global slowdown, and the US-China trade tensions, have a role to play in China's slowdown."

China's economy grew 6.2 percent year-on-year in the second quarter, a drop from 6.4% in the first three months of the year, and from 6.6 percent in 2018.