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"Due to the increasing uncertainties in the global economy, including the rising trade protectionism and unilateralism, the multilateral trading system is facing severe challenges and regular international commercial activities have been disrupted," Gao said.

"Economic growth is gradually stabilizing, which jazzes up demand to bolster prices," said Xu Gao, chief economist at Everbright Securities Asset Management Co Ltd.

"Everyone feels like we don't have a problem, and the reason they feel that way is they have their heads in the sand," said Oregon psychologist Wilson Kenney, who has developed student intervention programs.

"Downside risks have become more acute and include the possibility of disorderly financial market movements and an escalation of trade disputes," the report said, warning that intensifying trade tensions could result in weaker global growth and disrupt globally interconnected value chains.

"Despite the decline, China's services trade saw a largely stable trend in the first half. Services exports outperformed imports, with the services trade deficit narrowing by 46.1 percent from the same period of last year to 401.7 billion yuan," said Xian Guoyi, director-general of the ministry's department of trade in services and commercial services.