China's imports hit a record monthly high in August, indicating a strong domestic demand despite concerns of a global economic slowdown.Imports surged by 30.2% from a year earlier to $155.6bn (£98bn), government data released over the weekend showed.
Exports rose by 24.5% resulting in a trade surplus of $17.8bn, down from $31.5bn in the previous month.The data comes at a time when China has been trying to boost domestic demand in a bid to rebalance its economy.
"August's export and import data showed China's economic growth is driven by domestic demand, not external demand and its growth is still very strong," said Li-Gang Liu of ANZ.
China's economic expansion in recent years has seen the rise of a more affluent middle class, with higher disposable incomes.That has led to a growth in domestic demand, which has translated into higher import numbers.
"Growth of the Chinese middle class is well documented and it is something that will continue to drive growth," Kelvin Tay of UBS told the BBC.
Analysts said the recent appreciation in the Chinese currency had also played its part as the purchasing power of consumers had gone up.
The yuan has gained more than 5% against the US dollar in the last twelve months.
"If you had 100 yuan a year ago, you could buy X amount of things, today it is X-plus," he explained.China's push to boost domestic demand has been driven not only by efforts to rebalance its economy but also by fears that demand from its key markets may dip in the wake of a global slowdown.While its exports registered robust growth in August, analysts said that things are likely to get tougher.
"The European debt crisis and slowing US growth will be reflected in China's export data in the next few months," said Shen Jianguang of Mizuho Securities Asia.
"I expect Chinese export growth to be below 10% in the fourth quarter," he added.
However, some analysts argued that a slowdown in the global economy may fuel a jump in Chinese exports.
They said China's biggest strength in manufacturing has been its low prices and in times of a slowdown, consumers are looking for more affordable goods which could prompt a surge in demand."Not many countries can make it as cheap as the Chinese," said UBS' Mr Tay.
Along with a rise in imports and exports, bank lending in China also quickened in August.
Chinese banks lent out 548.5bn yuan ($86bn; £54bn) during the month, more than forecast, despite government efforts to curb credit growth in the country.
China's central bank has raised interest rates five times since October last year and also increased the bank's reserve ratio requirement nine times during the same period in a bid to quell prices.Data out last week showed the rate of inflation in China eased to 6.2% in August from 6.5% in the previous month.Analysts said the latest numbers showed that not only were the government's efforts to control inflation working, they were not having the negative impact on growth that many people had worried about.
"All the talk of demand being dented due to credit tightening is far fetched," Mr Tay said.
However, Mr Tay warned the combination of an increase in lending and a rise in domestic demand may see the central bank raise the cost of borrowing again in a bid to keep price growth in check."Based on the numbers that we are seeing, it will be premature to rule out a rate hike," Mr Tay told the BBC.