China's trade surplus shrinks as country pledges to boost stock market investments Weakening demand for exports will "provide further drag on the Chinese economy at least through the first half of the year," said Alistair Thornton, an analyst at IHS Global Insight in Beijing. Gross domestic product growth could ease to 8.5pc in 2012, a senior government researcher said last month, which would be the slowest pace since 2001, when the economy expanded 8.3pc. But it would still be within the official annual target of 7pc to 8pc, a level seen as necessary to create enough jobs to keep a lid on social unrest in the country of more than 1.3bn people. Other data released showed December's trade surplus widened to $16.52bn from $14.5bn in November, while year-on-year growth in exports and imports slowed. Exports rose 13.4pc to $174.72bn, compared with a rise of 13.8pc in November, while imports increased 11.8pc to $158.2bn compared a 22.1pc rise in the previous month. Meanwhile, the China Securities Regulatory Commission has said that Beijing will encourage institutional investors - including the national pension fund - to increase their market holdings. Guo Shuqing, the commission's chairman, said in a statement that the government would allow foreign institutions to invest more in Chinese stocks through existing schemes. China must "vigorously and safely promote the reform and opening of the securities and futures field," Mr Guo said. Investors were cheered by the remarks, sending Chinese stocks up 1.53pc in morning trade on Tuesday. "The encouragement of more long-term institutional funds to flow into the stock market will help investors recover their confidence," Zhang Yanbin, an analyst at Zheshang Securities, told AFP.