China's trade surplus slumped last month, as the Government hailed moves to encourage imports and cut tax relief on exports.

The surplus, which measures the difference between exports and imports, tumbled by 38.6 per cent to $6.9 billion (£3.5 billion) in March, compared with the same month last year.

Government figures show exports up 6.9 per cent to $83.4 billion last month, while imports rose 14.5 per cent to $76.6 billion.

The surplus marks a sharp fall from recent months. It was $23.8 billion in February and $15.9 billion in January.

The Chinese Government has been trying to reduce the surplus, which rose 74 per cent to $177.5 billion in 2006, largely because of huge exports to the United States.

Measures have been introduced to boost imports by scrapping the requirement for import licences on products including steel.

Tax breaks for exporters have also been cut.

Chinese politicians have been concerned that an unsustainable volume of money was flowing into the economy from exports.

The US has expressed concerns that Chinese exporters were benefiting unfairly from the artificially weak yuan.

The figures came as China hit back at a complaint by the US over the state of copyright protection in the Asian country.

China said that trade relations between the countries could be weakened after the US filed a complaint with the World Trade Organisation (WTO) over the abuse of intellectual property rights.

A spokesman for the Chinese Commerce Ministry said that it was "strongly dissatisfied" with the US complaint.

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