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The trade surplus hit $15.88 billion in January, piling pressure on the government which has made it a priority this year to reduce the imbalance.

The figure was a 65 percent rise year-on-year, although it dropped markedly from $21 billion in December, according to the General Administration of Customs.

Officials attributed the year-on-year increase to seasonal factors and because Spring Festival, which sees considerably less trading businesses, was in January last year.

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The government has taken a series of measures to stop the surplus from widening. It has not only prohibited processing trade and scrapped export tax rebates in some high-pollution and energy consuming sectors, but also provided tax rebates to imports of parts and materials for key equipment.

The impact of these measures is expected to gradually materialize this year.

The increasing surplus has resulted in a testy relationship with some key trading partners such as the United States and the EU.

Washington has filed a complaint to the World Trade Organization claiming that the Chinese government grants industrial subsidies to exporters.

"I don't think the surplus will sharply decline this year, say by 50 percent," said Mei Xinyu, a trade expert at the Chinese Academy of International Trade and Economic Cooperation.

But that does not mean China's attempts to cut the surplus are futile.

"The surplus would have been even bigger without these efforts," he said.

He added that some local governments still regard export growth and foreign investment inflows as major criteria to measure achievements, which counteract the policies of the central government.

Total trade volume reached $157.36 billion last month, up 30.5 percent year-on-year. Imports rose 27.5 percent to $70.74 billion, and exports increased 33 percent to $86.62 billion.

The European Union, the United States and Japan remain the top three trade partners of the country while India surpassed Canada to become the 10th biggest.

Processing trade increased 25.7 percent year-on-year to $70.7 billion while general trade increased 33.2 percent to $71.12 billion.

(China Daily 02/13/2007 page1)