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Doubts over China's strong January trade performance

Doubts over China's strong January trade performance
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China’s trade performance was vastly better than forecast in January.

The value of total exports climbed 10.6 percent from a year earlier.

Imports also jumped 10 percent from a year ago – with growth hitting a six-month high.

Analysts said it was unusual because normally the Lunar New Year holiday pulls down China’s trade activity.

Consequently they were suspicious of the numbers, suspecting they had been inflated by transactions that had not really taken place

Traders have been known to fake deals to sneak cash into China in order to avoid government controls on movement of capital.

“We find this strong level of export growth puzzling,” said Zhang Zhiwei, an economist at Nomura. “It is unclear to what extent the strong export data reflects the true strength in the economy.”

A run of underwhelming economic data from China in recent weeks had steeled investors for another disappointment on Wednesday, as markets braced themselves for more signs that the world’s second-largest economy is losing momentum.

Fears that China may be slipping into a sharper-than-expected slowdown were believed to have fed a fierce selloff in global financial markets in January, with emerging markets hit particularly hard.