The trade picture in the world’s second-largest economy staged a turnaround in March, with exports rising at the fastest clip since last February, official data revealed on Wednesday.

Dollar-denominated exports rose 11.5 percent on-year, recovering from a 25.4 percent slump hit in February that marked a seven-year trough. Imports meanwhile fell an annual 13.8 

percent, unchanged from February.

That left Beijing with a surplus of 29.86 billion dollars for the month, compared with February’s 32.59 billion dollars surplus.

The data sent both the Shanghai Composite (Shanghai Stock Exchange: .SSEC) and Hang Seng Index (Hong Kong Stock Exchange: .HSI) nearly 2 percent higher.

March’s strong export performance is partly due to a low comparison base last year and Beijing’s supportive policies, a customs spokesman told Reuters.

Separately,yuan-denominated exports climbed 18.7 percent on-year, from a 20.6 percent drop in February. Yuan-denominated imports fell an annual 1.7 percent, slower than the 

previous month’s 8 percent decline.

Wednesday’s data follow other indicators that suggest the world’s second-largest economy may be on the mend after recent concerns surrounding capital outflows and a volatile 

yuan, or renminbi.

Beijing’s foreign exchange reserves have fallen by $800 billion since 2014, according to CLSA data. March indicated a brighter outlook however, with reserves posting their first 

monthly increase since November . Meanwhile, the yuan has continued to weaken in recent sessions.

March’s official manufacturing Purchasing Managers’ Index (PMI) returned to growth for the first time since July with a reading of 50.2, a survey showed last week.

Meanwhile, mainland exporters expect trade performance to improve in 2016 from last year despite an unstable exchange rate and rising costs, the commerce ministry said last week, 

citing a survey, according to Reuters.

However, a sustained trade recovery depends on the global outlook.

A persistent weakness in external demand increases China’s downside risks, according to HSBC. Still, the People’s Bank of China (PBOC) has plenty of liquidity tools available in its 

war chest to stem any sharp crashes, including cuts to its benchmark interest rate and reserve requirement ratio as well as open market operations, the bank explained in a recent 

report.

But more than monetary policy, economists widely agree that supply-side reforms will be key to reinvigorating an economy growing at its slowest pace in 25 years.

"Appropriate demand expansion should be complemented by trimming overcapacity, inventory destocking, deleveraging, cost reduction and improving weak links in the economy," 

Chris Leung, an economist at DBS, said in a note.