Foreign trade between China and Japan slumped 8.8 percent year-on-year in the seven months from January through July, according to the Ministry of Commerce.

Shen Danyang, spokesman for the Ministry of Commerce, attributed the decline to three factors.

The first reason behind the drop is that, affected by sluggish economies in Europe and the US, Chinese manufacturers have reduced their imports of raw materials and parts from Japan, Shen said.

The second is the yuan's appreciation against the yen, which made China's goods and service more expensive for Japanese importers, he said.

The third reason lies in disputes over Diaoyu Islands that affect how Chinese view Japan, thus reducing their purchases of Japanese vehicles and electrical appliances, Shen said.