January trade: Strong growth but uncertainty remains

January trade figures are set to add to confidence in the national economy as the country battles an economic slowdown.

According to trade data released on Wednesday, imports rose 10 percent, up from January's 8.3 percent. Exports rose 10.6 percent, more than double the previous month's 4.3 percent rate.

Both figures beat market expectations.

Trade figures in early last year were exceptionally strong. They are believed to have resulted from irregular trade activities, such as inflated claims by exporters aimed at bringing extra money into the country in the first four months of last year. The inflation has raised the base level for year-on-year comparison this year.

The high bases make the headline growth rate of export this January even more impressive.

The data points to a still stable and brisk national economy.

The world's second-largest economy registered a 7.7 percent year-on-year growth for 2013, a rare low level in recent years. The weak performance is forecast to continue this year. The higher-than-expected export and import growth rates show that economic growth could be more stable than expected.

Of course, it is too early to conclude that the strong trade growth trend will continue.

The sub-index of the January Purchasing Managers' Index monitoring export remains weak. On the international market, the financial turbulence in the emerging markets — an important destination for Chinese traders — may create economic uncertainties, which may in turn affect demand for Chinese products.

Moreover, the seasonal factors might have also distorted the data. Last year, the Spring Festival fell in February while it was in January this year, a mismatch that could affect year-on-year comparison of economic activities.

We need to wait for the release of data for February to have a clearer look into the trade picture.