China's foreign trade showed signs of an upturn in July with exports and imports rising over the June figures despite an accelerated year-on-year fall, the General Administration of Customs (GAC) said Tuesday.

July exports increased 10.4 percent from June to 105.42 billion U.S. dollars. Imports rose 8.7 percent in July from the previous month to 94.79 billion U.S. dollars.

Measured from month to month, the country's foreign trade has risen since March, and the trend of recovery had stabilized, said a statement GAC e-mailed to Xinhua Tuesday.

However, compared with July last year, exports were 23 percent down while imports declined 14.9 percent as the global economic downturn sapped demand. In June, exports fell 21.4 percent year on year and imports dropped 13.2 percent.

Acceleration in the decline was a result of a high base of comparison in July last year as the global financial crisis only started to weigh on China's foreign trade in September, said Zhang Xiaoji, researcher with the Development Research Center of the State Council, a government think tank.

Zhang Yansheng, a researcher with National Development and Reform Commission, the country's economic planner, said the month-on-month increase in foreign trade indicated government policies to boost domestic demand and stabilize foreign trade had paid off.

It was also a result of domestic exporters' efforts to cut costs and develop new market, Zhang said.

"However, it's not practical to boost exports regardless of cost on the backdrop of still weak global demand," he said. This was likely to fan trade protectionism against Chinese products.

The government has raised export tax rebates seven times since last August to shore up exports against the global economic downturn. The most recent rise, affecting more than 2,600 items, was on June 20.

The room for further cuts in export tax rebates was slim and the government should focus more on improving the competitiveness of domestic companies and industrial upgrading, he said.

During the first seven months this year, imports fell 23.6 percent year on year to 519.62 billion U.S. dollars, while exports amounted to 627.1 billion U.S. dollars, down 22 percent from a year earlier.

China's trade surplus stood at 107.49 billion U.S. dollars in the first seven months, down 12.4 percent compared with the same period last year.

The European Union remained the largest trade partner of China in the first seven months, with a bilateral trade volume of 192.73 billion U.S. dollars, down 20.7 percent year on year. The U.S. was the second largest trade partner, followed by Japan.

(Xinhua News Agency August 11, 2009)