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Chinese trade is facing a challenging start to 2016 with both exports and imports experiencing steeper-than-expected falls in January – indicating weak demand both at home and abroad.

Exports fell 11.2

per cent in January from a year ago in US dollar terms – steeper than the 1.4 per cent drop recorded in December, the General Administration of Customs said on Monday.

READ MORE: China’s export figures stronger than expected in December amid fears over nation’s slowing economy

Imports slumped by 18.8 per cent in dollar terms – accelerating from a decline of 7.6 per cent in December.

The new figures meant the mainland’s trade surplus increased slightly to a record high of US$63.3 billion, compared with December’s level of US$60.1 billion.

The customs agency, which is responsible for managing the import and export of goods and services into China, also reported a drop in trade last month with major markets, including the European Union, the United States, Japan and the Association of Southeast Asian Nations.

Trade figures were much weaker than expected, mainly reflecting sluggish demand at home and abroad.

READ MORE: China will find it tough to achieve over 6.5 per cent economic growth in next five years, says state adviser

Investment growth night also be weak, which could be a result of the destocking of property and the removal of excessive capacity, said Zhao Yang, chief China economist at Nomura Securities.

Restrictions against intermediary trade in January and the tightening of the liquidity of the yuan on the offshore market had helped to curb the trade in fake goods, said China Merchants Securities, which noted that trade data in December, including exports to Hong Kong, had been inflated by fake trade activities.

Guangdong, the mainland’s biggest export province, saw only a slight rise in exports of 0.6 per cent in yuan terms, while exports in Jiangsu province fell 3.4 per cent, followed by a fall of 4.3 per cent in Zhejiang province.

The customs agency said a leading export indicator rose to 31.7 in January – up from 31.2 in December – which was the first monthly rise since February 2015.

This indicated export pressure was likely to be eased in the second quarter, it said.