The price advantages of Chinese exports to the European market have been mitigated by the euro deflation. The weak euro will also spur eurozone exports to other markets, adding competitive pressure to China's high value-added exports.

The pressure is on Chinese exports as the euro sinks against the yuan, said Ministry of Commerce spokesman Shen Danyang on Tuesday.

The yuan was up 10.8% against the euro until March 13, when the euro devalued 13.2% against the US dollar.

Imports from the eurozone have not been affected much by the fluctuation, as China mainly imports mechanical, electrical and chemical products from Europe, but investment and merger opportunities for Chinese companies have increased as asset prices tumbled, said Shen.

In the first two months this year, Chinese non-financial direct investment in the European Union increased almost ten fold.

According to the General Administration of Customs, China's exports plunged 3.2% year on year in January but increased 48.9% in February.

Growth of exports to the US and the EU hit 48.5% and 44.2%, respectively, in February thanks to a mini economic recovery there at the turn of the year.

Exports of both textiles and clothes nearly doubled in January compared with the same period last year, driven by higher export rebates since the start of this year.

Shen attributed part of export growth in February to a low comparative base in the same period last year. It is common for the Chinese economy to fluctuate in January and February due to the Lunar New Year holiday, which took place in February this year.