BEIJING ( TheStreet) -- China's trade surplus ballooned to an 18-month high of $28.7 billion in July as slowing economic growth hit imports.

China's customs bureau said exports rose 38.1% last month to $145.5 billion while imports climbed 22.7% to $116.8 billion. Forecasts called for exports to grow 35.5% in July and for imports to rise 30%.

The increase in exports and imports is down from June, when China's exports jumped 43.9% in June and imports were up 34.1%.

Following the release, China's Shanghai index dropped 2.9% to 2,595.27 Tuesday.

On Wednesday, the latest report on the U.S. trade balance is expected to show that the deficit widened to $42.5 billion in June from $42.3 billion in May.

-- Written by Robert Holmes in Boston.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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