SHANGHAI - The slump in China's exports eased in September in a sign global trade is improving and bolstering the government's efforts to sustain an economic recovery.

Exports from the world's third-largest economy in September fell 15.2 per cent year-on-year to US$115.9 billion, the slowest decline in nine months, the customs agency said Wednesday. Imports declined by 3.5 per cent to $103 billion -- the smallest drop since imports started to slide in November last year.

Both drops were improvements over August, when exports contracted 23 per cent and imports fell 17 per cent.

Exports collapsed in late 2008, battered by the global economic crisis, but Beijing's 4 trillion yuan ($596 billion) stimulus package has helped to revive growth through heavy spending on public works construction and other initiatives.

Economic growth accelerated to 7.9 per cent over a year earlier in the second quarter, up from 6.1 per cent the previous quarter, driven by the stimulus spending. The government is due to report third quarter economic growth next week

China's central bank reported Wednesday that the country's foreign reserves, the world's largest, rose to a record high $2.273 trillion by the end of September.

China's foreign reserves, more than double Japan's $1.05 trillion, are ballooning as the central bank soaks up dollars generated by the country's trade surplus and investment inflows.

Anecdotal evidence, such as complaints of labor shortages in key export centers and a mild recovery in container throughput through major ports, suggests at least a modest revival in global export demand.

"The trade is improving. We expect a further acceleration into the Christmas season," said Dong Tao, chief regional economist at Credit Suisse in Hong Kong.

China's export growth could turn positive by the year's end since orders began flowing in late August, he said.

However, some analysts also cautioned that the data were likely boosted by the fact that last month had two more working days than September 2008 because a major holiday fell in October this year instead.

Exports grew 6.3 per cent in September compared with the previous month, while imports were up 8.3 per cent month-on-month, the customs agency said, after adjusting for seasonal factors.

The trade surplus fell to $12.9 billion in September, down about 56 per cent from $15.7 billion in August.

The decrease was mainly due to a slowing in the year-on-year decline in imports, which were buoyed by iron ore shipments to China jumping to a record 64.6 million tons in September.

China imports much of the iron ore it uses for steelmaking, which is booming as stimulus spending and related bank lending flows into the construction sector. Strong demand for autos, amid record sales, has also generated stronger demand for steel and components.

Still, on a country-by-country basis, overall trade demand is still subdued.

In January-August, China's total trade with the European Union fell 19.4 per cent, while trade with the United States dropped 15.8 per cent and with Japan, 20 per cent.

"The situation in China's key export markets remains grim. There is little sign of a rebound in final demand for Chinese exports in Europe or the Americas," said Alaistair Chan, an economist with Moody's Economy.com in Sydney.

While domestic demand has helped fuel a turnaround after last year's slowdown, government-backed investment cannot be counted on to drive growth in the long haul, he said.

"A sustainable recovery in the Chinese economy will require a rebound in the export sector," Chan said.