Even though an increase in exports in August suggested that China's trade was becoming more stable, it cannot eliminate the possibility that the country will be faced with the dual difficulties of rising inflation and slower economic growth.

The country's exports increased by 2.7 percent year-on-year in August, a rate that failed to meet market expectations.

Policymakers, seeing inflation accelerate and industrial activity stagnate, now find themselves in the difficult position of having to stimulate growth and tame prices at the same time.