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China's trade figures disappointed analyst expectations by a wide margin in October, reinforcing views that the world's second-largest economy will likely have to do more to stimulate domestic demand given stubborn softness in overseas markets.

While Beijing has already repeatedly cut interest rates and softened the exchange rate to prop up the economy, latest trade numbers suggest that a greater risk of a hard landing remains.

October exports fell 6.9 percent from a year ago, dropping for a fourth month, while imports slipped 18.8 percent, leaving the country with a record high trade surplus of USD 61.64 billion, the General Administration of Customs said on Sunday.

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Economists polled by Reuters had expected dollar-denominated exports to fall 3.0 percent after a September's 3.7 percent dip, and imports to decline 16.0 percent, improving from a sharp drop of 20.4 percent.

Combined exports and imports fell 8.5 percent in the first 10 months of the year from the same period a year earlier, well below the full-year official target for growth of 6 percent.

"We see that the trade will unlikely turn around the momentum in the near term, and the renminbi exchange rate will be under downward pressure especially as Fed signals to hike soon," Commerzbank China economist Zhou Hao said.

Last week, the Ministry of Commerce said the value of China's exports this year was likely to stay similar to 2014 levels, while imports could drop sharply in the fourth quarter.

For 2016, the ministry expects to see steady growth in combined exports and imports as policy measures to support the trade sector take effect.

China's economy is facing headwinds from cooling exports and investment.

President Xi Jingping has said it was possible for the country to maintain an annual growth of around 7 percent over the next five years, but that there were uncertainties.

Chinese growth dipped to 6.9 percent in the third quarter, dropping below the 7 percent mark for the first time since the global financial crisis.

In order to lower social financial costs for firms, the central bank cut interest rates in late October for the sixth time in less than a year, and again reduced the amount of cash that banks must set aside as reserves.

It also guided the yuan into weaker territory against the dollar. The onshore yuan has weakened by more than 2 percent in 2015.

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Some analysts expect to see further rate cuts before the end of the year, but while this will relieve firms with high debt loads - which are concentrated in the state-owned sector - so far rate cuts have done little for China's export sector.

Buyers at the China's Canton Trade Fair, which ended this past week, saw contract values fall 7.4 percent from the last fair with attendance also declining.

The manufacturing sector contracted for a third consecutive month in October, with tepid demand both at home and abroad still a concern.

First Published:Nov 8, 2015 3:59 PM IST