A worker packages toys for export at a factory in Nantong, Jiangsu province. Average annual export growth slowed to 9.4 percent from 2008 to 2012, according to commerce officials. [Provided to China Daily]

BEIJING - China's January exports stunned the market with a 10.6-percent rise, far exceeding market expectation of less than 2 percent.

Reading between the lines, economists at home and abroad were divided over why the figure is so strong and its implications for the economy.

The General Administration of Customs said in a Wednesday statement that foreign trade climbed 10.3 percent in January, with exports surging 10.6 percent and imports up 10 percent.

Over-invoicing concerns

Exports at this time last year were significantly inflated due to illicit transactions, so January's exports should have been weaker, according to some forecasters.

In the first quarter of 2013, over-invoicing through Hong Kong allowed exports to balloon by more than 20 percent year on year.

Figures from the National Bureau of Statistics showed that exports in January 2013 increased 25 percent from a year earlier.

Zhang Zhiwei, chief China economist with Japan's Nomura Securities, said in a research note that he was puzzled.

"At this stage, we believe capital inflows may have contributed at least partly to January's strong export growth numbers," he said.

He surmised that the Lunar New Year had led to strong liquidity demand, yet domestic liquidity has been tight, so there may have been strong capital inflow.

Zhang argued that the data on industrial production for January and February will be released on March 13 and should help to confirm the real strength of export growth.

Others disagreed.

Kevin Lai, with Daiwa Capital Markets, said exports to Hong Kong were still inflated by $16 billion in December.

"At this point, we do not have data to show how much or little was inflated in January," Lai said.

Lu Ting, chief China economists with Bank of America Merrill Lynch, also noted that there are no clear signs of hot money inflow.

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