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WASHINGTON -- China overtook Japan to become the third largest export market for the United States in 2007, according to an annual trade report released by the Bush administration on Tuesday.

The US exports to China continued to increase in 2007, up 17 percent, the 8th straight year of double-digit growth.

Exports of foods, feeds and beverages, as well as automobiles and automotive parts were the largest growth categories, up 40 percent and 38 percent, respectively, said the report.

Overall, capital goods accounted for 45 percent of US exports to China in 2007, while exports of industrial supplies accounted for 38 percent. Foods, feeds and beverages, and automobiles and automotive parts accounted for 9 percent and 3 percent, respectively.

Agriculture exports increased by 13 percent in 2007, and accounted for 12 percent of total US exports to China. US exports to China have increased nearly 600 percent since 1994.

US exports to Canada, the largest US export market, accounting for 21 percent of US exports, increased by 8 percent in 2007, and US exports to Mexico, which is the second largest country export market and accounts for 12 percent of US goods exports, increased by only 2 percent in 2007.

Meanwhile, US exports to Japan increased 5 percent in 2007 and are only up 17 percent since 1994.