China’s politically sensitive trade surplus for 2007 soared to a record $262.2 billion (£133.4 billion), a figure that is likely to fuel European and US pressure on Beijing to allow its currency to strengthen.

However, there were signs that in recent months policies to reduce the imbalance are starting to bear fruit with exports slowing and imports growing at a significantly faster pace.

The surplus for December alone came in at $22.7 billion, below forecasts of $24.5 billion and down from November's $26.3 billion, while imports grew faster than exports for the third month in a row. Record nominal high oil prices partly explain the recent buoyancy of imports, but for 2007 as a whole export growth slowed by 1.5 percentage points while import growth picked up by 0.9 percentage points.

The government has introduced a slew of measures to cut the surplus, which is swamping the banking system with surplus cash and has been drawing the ire of the United States and the European Union. The customs figures showed the surplus with the United States rose 19 per cent to $163.3 billion, but the trade gap with the EU – China’s biggest trading partner – widened more significantly, expanding by 46 per cent to $134.3 billion.

The surplus has climbed more than ten-fold since 2003, stoking concerns among China’s major trading partners about the Asian nation's export juggernaut. Critics argue that China keeps its currency, the yuan, artificially weak and thus gives its exporters an unfair advantage.

Ma Qing, a Beijing economist with the CEB Monitor Group, said: “The conflict has spread from relations with the United States to Europe. EU officials are talking about it in each visit to China. It is a serious problem."

Gordon Brown is due in Beijing next week for his first visit as prime minister, but the trade issue is unlikely to be left off his agenda.

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