Trade to and from China continued to fall in September but plunged less violently than at any time in the last nine months in a sign that the giant economy has been steered into full recovery mode.

Growth in business at the country’s largest ports, said analysts at JPMorgan, also points to a “nascent recovery” in trade as regional movement of goods staggers back to life after a year in deep-freeze.

With China on the brink of overtaking Japan as the world’s second largest economy, official figures today showed a year-on-year export drop of 15.2 per cent in September compared to a fall of 23 per cent in August.

Imports contracted just 3.5 per cent in the same period, their slowest pace of decline since the Lehman Brothers implosion in September last year and below the 17 fall recorded in August.

Wensheng Peng, chief China economist at Barclays Capital said that the much better-than-expected September trade figures pointed to improving global and robust domestic demand, and supported his forecasts for a strong rebound in exports. But he also sounded a note of caution, given the unpredictability of consumer demand.

“Looking ahead we see exports continuing to rise next year as external demand recovers further,” he said, “the pace, however, will be significantly slower than the strong growth observed in previous years, reflecting weaker than pre-crisis growth in its major trading partners.”

Total trade between China and the European Union fell 19.4 per cent between January and August, and 15.8 per cent with the United States — a pace that has caused more bearish observers to question the sustainability of China’s recovery.

But while the export and import figures were still negative, they were far ahead of market expectations and are expected to provide welcome support to Beijing and its renminbi 4 trillion efforts to stimulate the economy.

Glen Maguire, chief China economist at Société Générale, said that the stronger import demand was a direct result of China “re-engineering its economy” to a capital formation intensive growth model.

Particularly strong, he said, were imports of iron ore and copper during August, along with imports from major trading partners such as Japan, Taiwan, South Korea and Germany.

The massive stimulus spending, which has been strongly backed by state-ordered bank lending, has focused on domestic infrastructure spending and public works projects — efforts from which the government in Beijing badly needs visible and quick results.

Brian Jackson, an economist at the Royal Bank of Canada, said that the figures would be a clear boost for Chinese officials concerned that the recovery was too narrowly reliant on government spending and investment. A return to external demand, he said “will provide an alternative source of support for growth.”

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