December trade data surged past expectations, with imports rising six percent and exports surging 14.1 percent on the year.
This time around analysts polled by Bloomberg have really hiked up their forecasts.
They now expect imports to surge 23.5 percent, and exports to climb 17.5 percent on the year. Trade balance is expected to narrow to $24.7 billion.
Trade data is widely considered to be one of the most reliable economic indicators in China. And hard landing watchers closely track import data because it centers on investments and has a domestic demand component to it.
But seasonality is expected to be a huge factor behind the strong January trade numbers which is why analysts are warning about giving them too much weight.
"They could be heavily distorted by the [Chinese New Year] holidays (note there are 22 working days in Jan this year versus 17 in Jan last year)," writes Bank of America's Ting Lu in a note to clients.
"We also suggest investors to take a pinch of salt on the actual readings in these two months. A more sensible approach is to read Jan and Feb together, just as China’s NBS does on major economic data such as IP and FAI." He is looking for exports to rise 26.5 percent and imports to rise 24.2 percent, above consensus.
Meanwhile Helen Qiao at Morgan Stanley warns that as the effect of the Lunar New Year holidays wears off we should be "cautious on the outlook for an export growth recovery, especially in view of the sluggish growth in developed market economies."
Qiao is looking for exports to rise 16 percent year-over-year (YoY), imports to rise 18 percent, and for the trade surplus to narrow to $29 billion.
Meanwhile, China will also be releasing its inflation data in a few hours. Analysts polled by Bloomberg are look for consumer prices to rise 2 percent on the year, and for producer prices (PPI) to decline 1.6 percent. This comes right after the People's Bank of China warned that it would now prioritize curbing inflation.
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