China's trade performance blew past expectations in March, with exports returning to growth for the first time in nine months, providing more evidence of stabilization.
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March exports rose a blistering 11.5 pct from a year earlier, customs data showed on Wednesday, the first increase since June and the largest rise since February 2015, although economists warned that base effects and seasonal factors played a major role in producing the number.
Recent data and surveys of manufacturing and services activities have hinted of slight improvements in the broader economy, which appears to be trickling down to the country's exporters.
Imports continued to fall but less than expected, declining by 7.6 percent in dollar denominated terms, led by sharp corrections in imports of tax-free foreign goods, rentals and leasing and imported equipment.
However, import volumes of most major commodities rose.
Analysts noted a surprise rise in imports from Hong Kong, which rose 116 percent from a year ago, could reflect capital flight out of yuan assets masking itself as import transactions.
The imbalance left the country with a trade surplus of $29.86 billion for the month, data from the General Administration of Customs showed, versus a forecast of $30.85 billion.
"I think the base effect was a pretty big factor, as last year's base was low," said Ma Xiaoping, analyst at HSBC, adding that because many export figures reported in March actually capture some February orders due to the variable dates of the lunar new year holiday every year.
"I think we should focus on the better than expected imports growth rate, which means domestic demand is also recovering, driven by infrastructure investment and also the real estate sector recovery."
Economists polled by Reuters had expected March exports to rise 2.5 percent, after tumbling 25.4 percent in February - the worst showing since May 2009, and expected imports to fall 10.2 percent, following February's 13.8 percent dip.
"Data across other Asian economies suggest that the headwinds in the trade sector remain," wrote Zhou Hao, economist at Commerzbank in Singapore, in a note reacting to the data.
"Given the gloomy economic outlook, we believe that the overall Asian trade growth will have limited upside this year."
Premier Li Keqiang said last week that China's economic indicators showed signs of improvement in the first quarter but a sluggish world economy and volatile markets deprive the changes of a solid foundation.
Recent factory activity surveys have fanned hopes the economy may be steadying but the government will have to keep up policy support to cope with lingering global uncertainties and the expected pain from its "supply-side" reforms.
China's producer prices fell less than expected in March while consumer inflation stabilized, a sign that strong deflationary pressures in the country's industrial sector may be lessening.
Key economic data, including first-quarter economic growth, are expected this week. The government aims for economic growth of 6.5 to 7 percent this year. The economy grew 6.9 percent in 2015, the weakest pace in a quarter of a century.
Chinese stock markets appeared to celebrate the data, with benchmark indexes in Hong Kong, Shanghai and Shenzhen rising more than 2 percent.
The yuan also firmed slightly, with traders seeing the high surplus as providing additional firepower against depreciation pressure. ■