Nomura: China's foreign trade to grow at single-digit rate in 2017

A Chinese steel worker helps load steel rods onto a large truck for transport at a plant

Exports climbed 7.9 percent year-on-year in January, reversing December's 6.2 percent fall, data from the General Administration of Customs revealed Friday.

Ahead of the release of the figures, economists cautioned that Chinese economic data in the month of the Lunar New Year holiday could be distorted. The Lunar New Year period in 2017 began in late January. Economists had forecast exports to grow 5.2 percent and imports by 15.2 percent.

China posted much stronger-than-expected trade data last month as demand picked up at home and overseas, an encouraging start to the year for the world's largest trading nation even as Asia braces itself for a rise in U.S. protectionism under President Donald Trump.

Imports in January surged 16.7% from a year earlier, compared with 3.1% growth in December.

January data also benefited from a more favorable comparison to a year earlier, when shipments slumped 10.9 percent in yuan terms.

But Nomura analysts said it can also be explained by a weakened yuan, which has made Chinese exports more affordable. "Large concerns remain ahead, as the trade situation for China largely depends on its relationship with the new USA administration", Nishihama said.

China's trade surplus widened in January to $51.35 billion from $40.82 billion the previous month, exceeding a median forecast for a $50 billion surplus.

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.

Still, by either measure it remained well above the sustained trade surplus of more than $20 billion that is one of three criteria used by the U.S. Treasury to designate another country as a currency manipulator. But the country was still a net exporter for the month.

Prolonged weakness in exports has forced China's government to rely on higher spending and massive bank lending to boost the economy, at the risk of adding to a huge pile of debt which some analysts warn is nearing danger levels.

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