A 77 percent decline in exports to China resulted in a worse than expected trade figures for July.

The Australian Bureau of Statistics (ABS) reports a surplus of $1.888 billion (seasonally adjusted) in July for Australia's balance of goods and services. The figure is a $1,550 million decrease on the revised surplus in June 2010.

Exports were down 4.0 percent (adjusted terms) while imports were up 2.0 percent In July. According to Australia and New Zealand Bank economist Riki Polygenis, the 77 percent drop in exports to China led to the low July figures.

In July, 40 percent of China's steel industry was closed for maintenance. The temporary closure led to decrease in exports. Even exports to India dropped 47 percent ($329 million) on the month before.

Polygenis said, “The trade balance is now half what it was in June... It was largely driven by a fall in resource exports, particularly in coal and iron ore.”

In seasonally adjusted terms, goods and services credits decreased $1,191 million (4 percent) to $25,395 million. Debits went up $359 million (2 percent) to $23,507 million.

The trend estimate of the balance on goods and services was a surplus of $2,361 million in July 2010.