Hot money inflows targeted

According to the National Bureau of Statistics, export values increased 18.4 percent in the first quarter from a year earlier, sharply accelerated from the 7.9 percent for the whole year of 2012.

Imports were boosted 8.4 percent year-on-year in the first quarter, compared with 4.3 percent last year.

Exports in March increased by 13.5 percent year-on-year, down from a 20.6 percent expansion in February, the General Administration of Customs said.

China registered a trade deficit of $884 million in March, but the funds outstanding for foreign exchange continued to increase for the third consecutive month, evidence of "hot money" inflows, analysts said.

Although the data showed faster export growth, the true situation may not be so optimistic, according to Wang Xuekun, deputy chief of the Research Institution of the Ministry of Commerce.

Data showed that in the first three months, exports from Shenzhen in Guangdong province increased 70 percent, and imports almost doubled from a year earlier, which was unreasonable, Wang said.

Excluding Shenzhen, the average export value in other areas rose a little more than 10 percent, and imports decreased in the first quarter compared with a year earlier, he added.

"The growth in imports and exports is expected to be slower than the government's target of 8 percent this year.

"It is especially difficult in the first half, because of external uncertainties which will act as a downside headwind to economic growth," Wang said.

Zhu Jianfang, chief economist with CITIC Securities Co Ltd, said that global funds are seeking higher returns in emerging markets, and that capital flows into China have been increasing since the end of last year.

"Overseas speculative funds that bypassed the SAFE's foreign capital regulations through fake cross-board trades are one of the reasons for the boost in export value," Zhu said.