Chinese exports and imports rise more than expected

A labourer is seen working in a textile factory in Huaibei, in north China's Anhui province Chinese trade data is often seen as unreliable

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Growth in Chinese exports and imports rose more than expected in July, a sharp recovery from the previous month.

Chinese exports rose 5.1% compared with a year earlier while imports gained 10.9%.

The rises were large swings from June's data, which showed exports had fallen 3.1% and imports had dropped 0.7%.

Last month, the government reiterated its 7.5% economic growth target for this year, after expansion slowed in the second quarter.

The July data meant the trade surplus narrowed to $17.8bn (£11.5bn), down from June's $27.1bn.

'Stabilisation'

Analysts said the results were surprisingly good, but warned against being too optimistic.

"July seems to reflect a return to a 'normal', relatively uninspiring trend after a weak June, rather than the beginning of an acceleration in growth," said Alaistair Chan from Moody's Analytics in a report. "While the worst seems to be over, the upturn will be relatively flat."

Start Quote

The fundamentals in the economy did not support such a strong rebound”

End Quote Wei Yao Societe Generale

China has seen its manufacturing and exports sector slow in the wake of the global financial crisis that has sapped demand for its products. These sectors were the main drivers of the economy for China through its years of blistering growth.

In June, China saw export growth decline for the first time in 17 months.

Analysts said the rise in exports was a stabilisation.

"The higher-than-expected export growth is easier to understand and this kind of growth rate still reflects that external demand just picked up very slowly," said Wei Yao from Societe Generale in Hong Kong. "It is more of a stabilisation rather than a sharp rebound."

Mixed messages

However, she said the sharp rebound in imports was harder to explain.

"Even though the government had announced some supportive measures, they should not show effects so soon. The fundamentals in the economy did not support such a strong rebound," she said.

Chinese data in general, and especially trade data, is often seen as being unreliable, with some suggesting that false invoicing and other factors could skew the numbers.

The data comes after mixed data from the Chinese economy last week, with official and private surveys of the country's manufacturing sector showing differing results.

The Chinese economy posted growth of 7.8% in 2012, its slowest pace since 1999.

Data showed it had since slowed further, with growth in the April-June period faltering to 7.5% compared to the previous year, from 7.7% in the first quarter.

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