CHINA'S export growth picked up unexpectedly in July against a weak global market, pushing the country's trade surplus to its highest level in more than two years and sending the yuan to a new high yesterday.

Exports last month jumped 20.4 percent from a year earlier to a record US$175.1 billion, up from June's 17.9 percent. Imports expanded 22.9 percent to US$143.6 billion, compared to June's 19.3 percent, the General Administration of Customs said.

The trade surplus was US$31.5 billion in July, widening further from June's US$22.3 billion, May's US$13 billion and April's US$11.4 billion.

But between January and July, China's trade surplus still contracted 8.7 percent from a year earlier to US$76.2 billion, thanks to better balances in the earlier months.

"July's trade growth confirmed continued resilience in China's external and domestic demand," said Chang Jian, an economist at Barclays Capital. "China's performance may offer some relief to the jittery global market, however, the outlook is uncertain as global market turmoil will point to downside risk to China's trade and its overall economy."

Chang said external developments in the coming months would be a key factor to watch with regard to interest and exchange rates.

Xue Jun, an analyst at CITIC Securities Co, said a rising trade surplus may trigger a new wave of external demand for a stronger yuan.

"People should notice the faster growth in China's exports is a result of more business deals sealed among emerging markets, not with major campaigners for a stronger yuan such as the US and the Europe," Xue said.

Bilateral trade between China and the US expanded 18.5 percent year on year in the first seven months, compared to China's overall trade growth of 25.1 percent.

Deals with Europe grew 21.1 percent to US$318.6 billion, also weaker than China's average, though it remained China's largest trading partner.

In contrast, trade with South Africa surged 86.6 percent in the year to July, leading other strong growers, including Indonesia and Vietnam which both jumped by more than 40 percent.

Mechanical and electrical products were the pillar goods in China's exports, accounting for 56.7 percent in terms of value in the first seven months.

Traditional commodities such as clothing and textiles also had steady growth, the Customs said.

Shanghai's trade increased 21.1 percent on an annual basis to US$247.5 billion in the past seven months, coming only after Guangdong and Jiangsu Province.