China's Jan-Feb trade beats forecasts, signals global trade rebound

BEIJING (Reuters) - China's export and import growth in the January-February period beat forecasts, suggesting global trade is turning a corner in an encouraging signal for policymakers given protracted weakness in manufacturing has been a drag on the economy.

China's exports in the two months were 7.1% higher than a year before, customs data showed on Thursday, beating a Reuters a poll that expected an increase of 1.9%. Imports were up 3.5%, compared with a poll forecast for growth of 1.5%.

Exports had risen 2.5% and at a far quicker pace in December, buoyed by a cyclical rebound in consumer demand overseas for semiconductors and electronics.

The customs agency publishes combined January and February trade data to smooth out distortions caused by the shifting timing of the Lunar New Year, which this year fell in February.

Chinese Premier Li Qiang on Tuesday announced an ambitious 2024 economic growth target of around 5% and promised to transform the country's development model, which is heavily reliant on exporting finished goods and industrial overcapacity.

The world's second-biggest economy has been grappling with sub-par growth over the past year amid a property crisis and as consumers hold off spending, foreign firms divest, manufacturers struggle for buyers, and local governments contend with huge debt burdens.

Policymakers have pledged to roll out further measures to help shore up growth after the measures implemented since June had only a modest effect, but analysts caution Beijing's fiscal capacity is now very limited while Li's address to the annual meeting of the National People's Congress failed to inspire investor confidence.

Many analysts worry that China may begin flirting with Japan-style stagnation later this decade unless policymakers take steps to reorient the economy towards household consumption and market-allocation of resources.

China's trade surplus grew to $125.16 billion, compared with a forecast of $103.7 billion in the poll and $75.3 billion in December.

(Reporting by Joe Cash; Editing by Shri Navaratnam)