Chinese trade bounce gives economy welcome boost

China's trade performance rebounded strongly last month with an unexpected bounce in both imports and exports.

In US dollar terms, exports rose 7.9 per cent compared to the more than 6 per cent drop recorded in December.

In local currency terms, exports were up an even more impressive 15.9 per cent, spurred on by the yuan strengthening against the US dollar over the month.

The better than expected result - the consensus forecast had been for a 3 per cent increase - points to an overall stronger growth in global trade, particularly when added to momentum seen building in other key Asian exporters.

Similarly, a 16.7 per cent increase in imports, up from 3 per cent growth the month before, indicates domestic demand is picking up. Reported in terms of the yuan, imports were up more than 25 per cent.

Overall, with the value of exports outpacing imports, the trade surplus expanded by 25 per cent to $US51.4 billion, a handy infusion of cash given ongoing concerns about falling foreign exchange reserves.

Capital Economics China economist Julian Evans-Pritchard said while seasonal factors, including the impact of the Lunar New Year holiday, played a large part in the results, underlying demand appears to have strengthened.

"These figures need to be taken with a pinch of salt as annual shifts in the timing of Chinese New Year make year-on-year trade growth highly volatile at the start of each year," Mr Evans-Pritchard said.

"Stepping back, the big picture is that Chinese trade values have been picking up in recent months thanks to a revival in global manufacturing, the continued strength of China's domestic economy and the rebound in global commodity prices."

"We expect this improvement to be sustained in the short-run, even as seasonal factors mean that headline trade growth is likely to fall back sharply in February," Mr Evans-Pritchard noted.