China exports and imports
A worker walks in a shipping container area at the Port of Shanghai

China has reported better-than-expected trade figures for January, reinforcing speculations that the world's second largest economy is well on track to recovery after the recent slump.

Exports climbed 25 percent year-on-year during the month from 14.1 percent reported in the previous. The figure was largely expected to remain at 17 percent.

Imports gained 28.8 percent, marking a sharp jump from the 6 percent posted in December and beating estimates of a 21.4 percent increase.

"China's economic conditions are improving and the trade data confirms the continuation of a recovery trend," Hirokazu Yuihama, senior strategist at Daiwa Securities told the BBC.

"Not just the trade data but retail, production and investment flows clearly show that the economy bottomed out in the third quarter last year."

Though the improved numbers indicate a firm economy, analysts are quick to caution that data in the first two months of the year are distorted by the Chinese New Year holiday season. In the previous year the festival was in January, while this year it starts in the coming week.

"The timing of Chinese New Year played a very important role," said Tao Wang, an economist with UBS in Hong Kong told BBC

"It's always difficult to predict the exact strength [of the trade numbers], given the number of working days."

Chinese economy had expanded 7.8 percent in 2012, its slowest annual rate since 1999, as the global slowdown hurt demand. But a slew of government stimulus measures had boosted activities and pushed growth towards the year-end.

The country's new regime is seeking to further improve conditions without stoking the inflation rates. The Gross Domestic Product is widely expected to pick up to just over 8 percent this quarter from the 7.9 percent reported in the previous three months.

The trade data cheered Chinese markets. The Shanghai Composite Index traded 0.34 percent up to 2426.82 points at about 04:07 GMT.

China