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Forget a slowdown, China's economy set to accelerate

This picture taken on December 7, 2013 shows a Chinese worker arranging the finished toys.
STR | AFP | Getty Images
This picture taken on December 7, 2013 shows a Chinese worker arranging the finished toys.

There is a very powerful growth impulse coming from China's export sector that could provide a boost to the world's second-largest economy over the coming quarters, according to economists.

"Cyclically, people underestimate the strength of that export-led recovery. The truth is we're getting a very powerful growth impulse for Asian exports coming out of Europe and the U.S., and that will drive Chinese GDP [gross domestic product] growth higher over the next 3-4 quarters," Michael Spencer, chief economist, Asia Pacific and co-head, Global Economics at Deutsche Bank told CNBC Asia's "The Call" on Monday.

(Read more: Chinese export for November beat forecasts)

"The consensus view doesn't see that at all. Consensus is expecting weaker growth in China," Spencer added.

China recorded its biggest trade surplus in almost five years in November, as robust exports ran far ahead of import growth. Exports jumped 12.7 percent on-year, compared with a rise of 5.6 percent in October, driven by a recovery in demand from high-income nations.

Exports to the U.S. rose to 17.7 percent on-year in November from 8.1 percent in the previous month, while shipments to the EU expanded 18.4 percent, after a rise of 12.7 percent.

Louis Kuijs, chief China economist at Royal Bank of Scotland says stronger export growth is a key feature of the bank's upbeat growth outlook of 8.2 percent in 2014, up from an estimated 7.7 percent in 2013.

"We expect export growth to benefit from the improving global demand trends in the coming quarters, and this is an important factor behind our overall growth projection," Kuijs said.

However, some China watchers believe the data may have overstated actual export momentum. Zhiwei Zhang, chief China economist at Nomura, says capital inflows could have inflated the strong export growth.

(Read more: China's economic reforms: What you need to know)

"There are some signs that capital flows may have played a role. China's export growth in November diverged significantly from the weak export performance of its neighbors, such as South Korea," Zhang said. South Korea's overseas shipments rose just 0.2 percent in November from a year earlier, well below expectations for a rise of 2.8 percent.

In addition, the State Administration of Foreign Exchange (SAFE) over the weekend stepped up its efforts to clamp down on false trade flows, he added. In a statement on its website Saturday, SAFE said banks and companies will be subject to increased scrutiny of their trade financing and foreign-exchange operations.

"It is hard to tell, however, to what extent exports data may have been distorted by capital inflows in November. Industrial production data should help verify if the export rebound is real," Zhang added. He forecasts GDP growth will slow to 7.5 percent in the fourth quarter - from 7.8 percent in the previous three months - before decelerating to 6.9 percent in 2014.

(Read more: A China data deluge for Asia markets this week)

China is due to a release a slew of economic data on Tuesday, including industrial production, fixed asset investment and retail sales numbers for November.

Economists polled by Reuters forecast industrial output rose 10.1 percent in November from a year earlier, compared with a 10.3 percent rise a month earlier. November retail sales are forecast to rise 13.3 percent from a year earlier, unchanged from a month before.

—By CNBC's Ansuya Harjani; Follow her on Twitter: @Ansuya_H

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