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China's trade surplus in March narrowed drastically by 38 percent year-on-year following government measures to curb the imbalance.

It stood at $6.87 billion, the first time in 13 months that the monthly figure dropped below $10 billion, according to the China General Administration of Customs.

Exports gained 6.9 percent to $83.4 billion in March while imports climbed 14.5 percent to $76.6 billion.

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The figures indicate that the central government's measures to stop the trade gap from widening are beginning to pay off, said Xue Hua, an analyst with Shenzhen-based China Merchants Securities.

Beijing has lowered or scrapped export tax rebates on a number of resource-intensive and highly-polluting products and banned processing trade of some categories in a bid to slow down export growth.

Xue noted the sharp increase in the trade surplus for February was because exporters rushed to sell products overseas in the first two months of this year before the export-control policies took effect. The surplus for the first two months of the year totaled $39.7 billion, triple the amount for the same period last year.

Vice-Minister of Commerce Wei Jianguo said earlier this week that China is ready to take more measures to boost imports of machinery and hi-tech products to redress the imbalance.

He said the government will unveil more policies to increase imports of advanced equipment, increase imports from countries that have a large deficit with China and simplify import procedures.

"The key to easing concerns about the trade surplus is to restructure China's foreign trade rather than simply squeeze exports," he added.

Xue predicted the growth of the trade surplus may slow down to 30 percent year-on-year from 80 percent in 2006, but the figure will still be quite high.

China's trade surplus with the United States fell to $9.5 billion in March from $12.3 billion in February, while it declined to $6.4 billion from $11.8 billion with Europe.

But the surplus was $46.44 billion for the first three months, nearly double for the same period in 2006.

(China Daily 04/11/2007 page1)