China's trade surplus widened sharply last month as export growth accelerated, but analysts said its trade performance may weaken going forward as the global economy falters.

China's trade surplus widened to US$31.5 billion (S$38.2 billion) last month, its highest monthly level since January 2009, government data showed yesterday. The surplus was up from US$22.3 billion in June and well ahead of economists' expectations for US$26 billion.

Exports were surprisingly strong, rising 20.4 per cent from a year earlier to US$175.1 billion, compared with 17.9 per cent growth in June.

Still, analysts warned the strong export growth may not be sustainable.

"There is a risk that external demand may come off in the second half of the year because of the problems in the United States and Europe," said Royal Bank of Canada economist Brian Jackson.

Imports rose 22.9 per cent from a year earlier to US$143.6 billion last month, up from the 19.3 per cent rise in June.

The large trade surplus "also suggests that the yuan has room for further appreciation against the US dollar over the rest of the year", said Mr Jackson.

A wider surplus adds to the influx of cash into the Chinese economy, potentially fuelling inflation pressures. Given recent market turmoil, China is likely to hesitate before adopting any further tightening measures, analysts say, but one possible policy option would be to accelerate yuan appreciation.

ANZ economist Liu Ligang forecasts that the yuan will rise by 6 per cent against the dollar this year.

The yuan hit a fresh high against the dollar late yesterday after the Chinese central bank guided its currency sharply upwards. It traded between 6.4120 yuan, its lowest level since China's landmark revaluation in 1994, and 6.4238 yuan.

The People's Bank of China surprised dealers by setting the dollar/yuan central parity at an all-time low of 6.4167, the lowest on record and down from a parity rate of 6.4335 on Tuesday.

The yuan has risen 6.4 per cent against the US unit since June last year.