The Shanghai International Purchasing Confidence Index dropped to 50.4 in the second quarter this year, hitting a three-year nadir since it was first launched in the third quarter of 2010.

The Shanghai International Sourcing Promotion Center announced the latest index reading on Thursday after conducting a survey of 200 multinational companies in China.

The index is designed to predict purchasing intentions and sketch the outlook of Chinese export companies for the following quarter. After slipping to its lowest level, the index suggests a challenging period for exports.

Latest data from the General Administration of Customs added to the evidence that trading activity is losing steam.

In June, the value of China's exports and imports declined 2 percent year-on-year to $321.5 billion, with exports dropping 3.1 percent to $174.32 billion, and imports edging down 0.7 percent.