CHINA’S foreign trade slump eased in August, adding to early signals the worst may be over for some parts of the world’s second-largest economy as it tries to regain momentum.

Both exports and imports were better than estimates and significantly less severe than July’s downturn.

Exports dropped 8.8% in dollar terms from a year earlier, compared with the 14.5% decline in July, the General Administration of Customs said Thursday.

The result was better than the 10% fall expected by economists in a Wall Street Journal poll.

Chinese imports declined 7.3% in August, compared with July’s 12.4% fall and the 9.7% drop expected by the economists surveyed.

That put China’s trade surplus at US$68.36 billion, lower than the US$80.6 billion surplus in July and the US$73.8 billion surplus expected by economists.

“Improving China trade data are an early sign of growth stabilization,” said Raymond Yeung, chief economist for greater China at Australia & New Zealand Banking Group Ltd.

Other data have suggested global demand is beginning to pick up, providing some hope for China’s trade in the coming months.

South Korea’s exports, a bellwether for world trade, also declined at a more moderate pace in August than the previous month.

Thursday’s data showed China’s shipments to Europe and the Association of Southeast Asian Nations (ASEAN) continuing to record double-digit declines, but there was a notable improvement in U.S. trade: Exports dropped 9.5% in August, compared with a 23.1% slump in July.

Exports had been a key source of growth for the nation during the pandemic, but muted global demand has weighed on shipments throughout the year and exacerbated the economic slowdown.

“Due to the low base at the end of last year, it’s very likely for exports to return to growth at the end of this year,” said Nie Wen, an economist at Hwabao Trust.

The milder decline in imports, meanwhile, provided a sign that the downturn in domestic demand may be bottoming out.

South Korean shipments to China, a leading indicator of the latter’s imports, dropped just a fifth last month, slowing from a decrease of 27.5% a month earlier, offering another nod to conditions stabilizing in China.

China’s government has in recent weeks rolled out a slew of incremental measures to revive business confidence and help the property market, a key source of economic strain.

“Imports are likely to recover further in the coming months,” economists at Capital Economics Ltd. wrote in a research note.

“Greater progress on existing housing projects and a step up in infrastructure spending are starting to boost construction activity.” (SD-Agencies)