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Better-than-expected trade data has shown demand for Chinese goods is continuing to improve, in the latest sign of recovery for the world's third-largest economy.

According to official figures released on Wednesday, China's exports in September fell at the slowest pace in nine months, dropping 15.2 per cent on the previous year.

Imports over the same period fell 3.5 per cent year-on-year in the smallest drop since imports started to slide in November 2008.

Both figures are significant improvements over August data, when exports contracted 23 per cent and imports fell 17 per cent.

China's export trade collapsed in late 2008 as the global economic crisis stripped demand for Chinese goods.

Stimulus

But a $596bn stimulus government package has helped to revive growth through heavy spending on public works construction and other initiatives.

Analysts said the latest trade data may help sway the government to start winding up stimulus measures in 2010, with recent US data pointing to stronger demand for China's exports in the months ahead."

"Chinese growth this year has been heavily reliant on government-directed investment, which is why senior officials have continued to characterise the recovery as not broadly based or firmly established," Brian Jackson, a Hong Kong-based senior strategist at the Royal Bank of Canada Jackson, told the AFP news agency.

"Stronger external demand will provide an alternative source of support for growth and provide scope for Beijing to start tightening policy gradually from early 2010."

Chinese officials have previously said the economy remains on target to achieve its target of eight percent growth in 2009, following expansions of 6.1 per cent in the first quarter and 7.9 per cent in the second quarter.

The release of the latest trade figures also boosted shares on the Shanghai stock market, with the benchmark index ending the day at a four week high, up 1.17 per cent.