China on Saturday reported a sharp slowdown in exports in May compared to the previous month while imports unexpectedly dropped, as the world's second largest economy grapples with slowing growth and sluggish overseas demand.

Overseas shipments rose just one percent to $182.8 billion last month, far lower than 14.7 percent recorded in April, customs authorities said in a statement.

It also missed a medium forecast of 5.6 percent expansion in a Dow Jones Newswires' poll of economists.

Imports dropped 0.3 percent to $162.3 billion, said the statement, down from a rise of 16.8 percent in April and well below the economists' median forecast of a five percent increase.

Trade surplus stood at $20.4 billion last month, it said, widening marginally from the previous month.

The disappointing performance was due to "a slowdown in the domestic economy, sluggish foreign demand, companies' high costs, the appreciation in the yuan's real value and a worsening trade environment", customs said.

It was also a result of a crackdown on misreporting by importers and exporters, it added. They may have overstated their business to seek to evade Chinese government controls on capital movements and channel funds into the country, he said.

Two-way trade between Hong Kong and the Futian Bonded Area, in the nearby Chinese city of Shenzhen, soared by "an extremely abnormal rate" of six times in the first quarter of the year, state broadcaster China Central Television reported Saturday.

A truck carrying the same batch of electronic products crossed the border 54 times in 11 days in April, each time logged onto the customs' record as a new shipment, it said.

The world's second-largest economy registered 7.8 percent growth in 2012, its slowest rate in 13 years.

The government in April announced a surprisingly weak expansion rate of 7.7 percent for the first quarter, dashing hopes that growth was poised to accelerate in 2013 after showing strength at the end of last year.

More recent economic indicators also failed to improve the outlook, with manufacturing activities in the country coming in at a contracting eight-month low of 49.2, according to a survey by HSBC this week. A figure below 50 indicates a contraction.

"Growth in exports to all major developed economies slowed... suggesting a recovery in the global economy is yet to be strong," Tang Jianwei, a Shanghai-based economist with the Bank of Communications, told AFP.

"Domestic demand has continued to be slack, affecting imports of commodities and raw materials."

He also noted that rising trade disputes between China and major trade partners have had a "rather big negative impact" on the country's imports and exports.

On Tuesday the European Commission imposed anti-dumping duties on imports of Chinese solar panels. Beijing responded immediately with an announcement of an anti-dumping probe into European wine, widening a row that has already involved telecom equipment, chemicals and seamless pipes.

The world's top exporter is also embroiled in trade disputes concerning other products with countries including the United States and Japan.

ANZ Bank analysts said the prospects for China's exports looked "grim" due to trade frictions and a strong Chinese currency, which has gained almost 20 percent against the yen this year.

"We believe China's loss of competitiveness relatively to ASEAN and Japan will gradually show up in China's export data in the following months, which will have dire consequences to China's already weak job markets," said Liu Ligang and Zhou Hao in a research note.

But Tang said the monthly change in trade data is unlikely to prompt the government to take any immediate measures.

"The Chinese leadership is much more tolerant of slower economic growth than in the past. They want to focus on reforms," he said.

Chinese leaders have said expansion will slow in the next stage of the nation's development from the near-double-digit yearly rises of recent decades, as they try to retool the economy to emphasise consumer demand as the key growth driver, rather than investment and exports.

The government has set its economic growth target for this year at 7.5 percent.