Surprise slump in China trade figures fans fears global growth is slowing

Weakest exports for a year and poor imports affect markets worldwide before Chinese shares rally on expectation Beijing will step in to stimulate economy

A surprise fall in Chinese exports fanned fears that global growth is losing momentum and sent ripples through world markets on Monday.

Figures showing the biggest drop in overseas sales from China for a year and a slump in imports took financial markets by surprise. In the UK, fears about the strength of the world's second largest economy knocked the FTSE 100 share index off its record highs as mining stocks in particular were sold.

Related: Chinese export fall raises growth fears - live

A bigger than expected slide in both March exports and imports has raised concerns about the prospects of the Chinese economy hitting its 7% GDP target later this week "

These data misses raise concerns that not only is the Chinese economy failing to rebalance with demand remaining low, but also the global economy's demand for Chinese exports is also falling back, raising concerns about the state of the global recovery as well.

In China, growth will moderate further, to 7.1% in 2015 and 6.9% in 2017, reflecting continued policy efforts to address financial vulnerabilities and gradually shift the economy to a more sustainable growth path. Continued measures to contain local government debt, contain shadow banking, reduce excess capacity, curb energy demand, and control pollution will reduce investment and manufacturing growth. However, targeted stimulus is expected to continue to mitigate the impact on short-term growth, should this show signs of slowing considerably below the government's indicative target of about 7%.

East Asia Pacific has thrived despite an unsteady global recovery from the financial crisis, but many risks remain for the region, both in the short and long run.

To address these risks, improving fiscal policy is key. With low oil prices, countries - whether oil importers or exporters - should reform energy pricing to usher in fiscal policies that are more sustainable and equitable.