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China Recovery Dogged By Doubt As Data Questioned

BEIJING (NYSE:AP) - China's trade expanded in March in a possible positive sign for its recovery but analysts said the data might be inflated and give a distorted picture of the economy's health.

Imports rose 14.1 percent after growing 5 percent rate for the combined January-February period, customs data showed Wednesday, suggesting Chinese manufacturers and consumers might be buying more.

Export growth slowed to 10 percent from the previous two-month period's 23.6 percent. That could add to challenges for newly installed Communist Party leaders as they try to sustain the rebound from China's deepest downturn since the 2008 global crisis and avoid job losses.

Analysts said, though, the data might be distorted by companies misreporting trade or government manipulation, clouding the picture of whether an economic recovery is gaining traction.

Exports probably are even lower than reported, based on what is known about shipments into Hong Kong, said Francis Lun, chief economist of GE Oriental Financial Group in Hong Kong. Hong Kong is Chinese territory and handles a big share of the mainland's trade but is treated as a separate customs region.

"The figures in Hong Kong to and from China do not add up," he said. "Instead of 10 percent growth, you have 2 or 3 percent."

China's economic growth rose to 7.9 percent in the three months ending in December, up from the previous quarter's 7.4 percent. Analysts say the recovery from the country's deepest downturn since the 2008 global crisis is being propped up by government spending and could be vulnerable if trade or state-driven investment weakens.