China’s exports contracted 15 per cent in March from a year earlier in a surprise drop that will exacerbate concerns about the slackening Chinese economy.

Analysts had expected exports to rise 12 per cent in March on a yearly basis.

In a sign of soft domestic demand, imports into the world’s second-biggest economy also shrunk 12.7 per cent last month compared with a year ago, data from the General Administration of Customs showed.

That compared with a Reuters poll forecast for a 11.7 per cent drop in imports.

The trade performance left China with a trade surplus of $3.1 billion last month, much smaller than forecasts for a $45.4 billion trade gap.

In line with the slowing Chinese economy, China’s trade sector has been buffeted by lacklustre foreign and domestic demand in the past year, raising concerns among policymakers.

Chinese vice premier Wang Yang was quoted by Xinhua state news agency as saying earlier this month that authorities must act to arrest China's export slowdown lest it further dampens economic growth.

Mr Wang was quoted as saying that local governments should offer "preferential policy support" and encourage more private investment in the export sector.

Tepid growth in the trade sector could hurt jobs, which the government wants to protect for fear that widespread unemployment could fuel social discontent and trigger unrest.

So far, China’s labour market appears to be holding up well, despite signs that economic growth is steadily grinding to its lowest in a quarter of a century of around 7 per cent.

Data on growth in the first quarter will be released on Wednesday.

China expanded its trade sector by 3.4 per cent in 2014, according to government data, missing the government’s growth target of 7.5 per cent by more than half.

Taking that disappointing outcome into account, the government has lowered its growth target for 2015 combined imports and exports to around 6 per cent. Reuters