China's trade rebounded in July in a possible sign that the world's second biggest economy is stabilising following a slowdown over the past year.

The improvement offers encouraging hope for China, which is struggling to halt a downturn that dragged growth to a two-decade low in the latest quarter amid weak global demand and efforts to cool a credit boom.

China's exports rose 5.1% from a year earlier in July while imports leaped 10.9%, customs data showed today.

Economists had expected trade to grow after shrinking in June but the rate of growth surpassed expectations. China's politically sensitive global trade surplus narrowed to $17.8 billion.

Economists said the surge in imports suggests that domestic demand is holding up, an important goal for China's policymakers, who are trying to reduce the economy's dependence on trade and investment in favour of more self-sustaining domestic consumption.

Imports of iron ore, an important commodity used to make steel, surged 24%by volume, while copper imports grew 12%, both at the fastest rates in more than a year.

Analysts said the return to growth for exports was a sign of some stabilisation in external demand, at best and not yet a solid recovery for the country's massive export industries. They said the figures were a sign of improvement but cautioned about reading too much into a single set of numbers.

The trade report follows a survey last week that found manufacturing activity expanded unexpectedly in July. The world's second-largest economy grew 7.5% in the three months ending in June, down from 7.7% in the previous quarter, as growth in factory production and investment slowed. Some analysts fear growth could slide below 7% in coming quarters.

Chinese leaders are facing pressure to steer the economy to a goal of 7.5% growth for the year, which is far stronger than forecasts for the US, Europe and Japan, but would be the country's weakest performance since 1991.

Today's figures showed that exports to the US, China's biggest foreign market, edged up 2.3%, leaving a trade surplus of $19.1 billion. Exports to the 27-nation European Union shrank 2.8%, for a trade gap of $10 billion. Exports contracted by 3.1% in June while imports shrank 0.7%.