Stronger-than-expected growth in China's foreign trade last month has surprised the market and prompted many analysts to look for further hints of underlying economic strength.
China's foreign trade volume climbed 10.3 percent year on year in January to 382.4 billion U.S. dollars, marking a strong beginning for the year, according to customs data released Wednesday.
Exports rose 10.6 percent from a year earlier to 207.13 billion U.S. dollars, while imports increased 10 percent to 175.27 billion U.S. dollars, the General Administration of Customs (GAC) said in a statement.
The trade surplus stood at 31.86 billion U.S. dollars last month, up 14 percent from a year ago and 24.25 percent from December.
STRONG UPSIDE SURPRISE
Chang Jian, chief China economist at Barclays, called the January figures "surprisingly strong," as the institution expected weak January trade performance based on weak PMI export orders, a high base from last year, and holiday distortions.
According to the National Bureau of Statistics, the index for new exports orders fell 0.5 point in January to 49.3, under the boom-bust line of 50 for a second month in a row.
"Today's strong export report could have been boosted by a rush of shipments ahead of the Chinese New Year holiday," Chang said.
The Spring Festival, or China's lunar new year, fell on Jan. 31 this year, marking the start of a week-long holiday for Chinese workers. The holiday began on Feb. 10 in 2013, and last year's additional working days contributed to its high base of comparison.
Overall, the data suggest that the underlying strength of Chinese exports is probably better than we expected, Chang said.
His views were echoed by Lu Ting, chief China economists with Bank of America Merrill Lynch.
The strong trade growth will be positive to markets even if the quality of January data was significantly affected by the lunar new year holiday, said Lu.
"We may still claim that these readings are quite encouraging and might point to stable economic growth in the first quarter," Lu said.
New data showed that trade with the European Union, China's largest trade partner, surged 14.6 percent to 341.19 billion yuan, while trade with the United States, its second-biggest trade partner, rose 8.8 percent to 299.23 billion yuan.
China's trade with the Association of Southeast Asian Nations, its third-largest trading partner, rose 11.3 percent year on year to 259.06 billion yuan, and trade with Japan rose 7.8 percent to 170.05 billion yuan.