Export surge

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Chinese exports rebounded in December, jumping 17.7 per cent after 13 months of declines to total more than $1.2 trillion for the year, Xinhua reported on Sunday, citing data from China's customs agency.

Huang Guohua, a customs agency economist, said December's export surge, which put it ahead of Germany as the world's biggest exporter for the first time, was an "important turning point" for the country's manufacturers.

"We can say that China's export enterprises have completely emerged from their all-time low in exports," he said.

The value of China's imports also soared in December - up by more than half from a year earlier, mainly due to industrial demand for energy and raw materials such as crude oil and iron ore.

The domestic economy is showing positive signs, too, with more than 13 million cars and light trucks sold in the country last year, a 45 per cent increase in sales compared to 2008 and about three million more vehicles sold than in the US.

Still, the government said it would continue its stimulus spending that has kept the Chinese economy and consumption growing while the US and other major economies have struggled with recession.

Xie said efforts to expand domestic demand will include policies to raise incomes, especially for poorly paid workers and farmers; continued spending on public works, including schools and hospitals; and taxation changes.

Spending problems

Sebastien Barbe, a senior Asia economist with the Hong Kong investment bank Calyon, told Al Jazeera that the growth in China was still "mostly led by the government".

"This measure however, while leading to some positive outcomes, is not completely sustainable, because ultimately, if the economies of the US and UK do not pick up, there will still be huge problems for China," he said.

China overtook Germany in 2007 as the third-largest economy and is expected to unseat Japan as No 2 behind the United States as early as this year.

Besides being the biggest auto market and steel maker, China, with foreign currency reserves estimated at more than $2 trillion, is also a major buyer of oil, iron ore and other commodities, and has emerged as an investor and key voice in managing the global economy.