Exports for July were 14.5 percent higher than July last year, according to the Beijing-based customs administration. Meanwhile, imports dropped 1.6 percent boosting the trade surplus to $47.3 billion, 170 percent higher from the previous year.
Economists surveyed by Bloomberg had estimated a 7 percent increase in exports, lower than the actual figures.
According to Qu Hongbin, China economist with HSBC, the growth in exports was due to increased demand in Europe, the U.S. and Japan. The three accounted for 13 percent year-on-year growth in exports, up from the eight percent reported in June.
"The improvement in export growth was broad-based in July...If this can be sustained for the next few months, this could be the beginning of a turnaround in regional trade," said Hongbin and Julia Wang, economists with HSBC.
The yuan strengthened on the news, rising 0.08 percent to 6.1570 per dollar, with many suggesting there will be pressure on China's central bank to let the currency appreciate and not intervene in the foreign exchange market.
"If the central bank does not interfere with the foreign exchange market, pressure for the yuan to appreciate will further increase," said Liu Ligang, chief Greater China economist at ANZ Banking Group.