China reported better-than-expected trade data for January as demand picked up both at home and abroad, an encouraging start to 2017 for the world's second largest economy.

China's exports in yuan-denominated terms rose 15.9 percent year-on-year in January, while imports increased 25.2 percent, customs data showed on Friday. Foreign trade volume reached 2.18 trillion yuan (about 316.8 billion US dollars) in January, up 19.6 percent year on year.

That left the country with an initial trade surplus of 51.35 billion US dollars for the month, the General Administration of Customs (GAC) said.

The GAC also said trade with major partners, including the European Union, the US and Japan, all shot up. China's trade surplus with the US fell around 1.5 percent from December to 21.4 billion US dollars in January on increased imports. 

Analysts say trends in January and February can be distorted due to the Chinese New Year holiday. They also say the fast rise in China's foreign trade came on price hikes in such commodities as iron ore, crude oil, and coal. 

“The rise in commodity prices is based on economic reasons. This means the conditions for global economy have improved, lifting prices. This also means the market sentiment is on track for recovery,” said Yan Min, a scholar from China’s State Information Center. 

While overall exports grew, China's steel exports fell 23.8 percent in January year-on-year. GAC said the decline was the result of Beijing's efforts to reduce steelmaking overcapacity after continuous pressure from the EU and the US, which have accused the Asian giant of dumping. 

China, the world's largest producer of steel, exported 7.42 million tons of the product last month. That’s less than the 9.74 million tons exported in January 2016 and the 7.8 million tons in December.