The continued surge in China's exports comes despite a series of safety alerts last year over a range of goods, from Chinese-made toothpaste to seafood.

 

According to the figures published by the General Administration of Customs, China's trade surplus with the US in 2007 rose 19 per cent to $163.3bn, according to customs data.

 

In 2006 US trade figures showed a $232.5bn deficit with China, with many analysts expecting the 2007 deficit to easily surpass that.

 

Trade data reported by the US and China on their bilateral trade often differs widely.

 

According to the latest Chinese figures, the 2007 trade gap with the European Union, Beijing's biggest trading partner, rose even faster, ballooning by 46 per cent to $134.3bn.

 

The growing tensions have raised fears
of a possible trade war [GALLO/GETTY]
Overall China's surplus has now climbed more than 10-fold since 2003 and has become a "serious problem", Ma Qing, a Beijing-based economist told AFP.

 

"The conflict has spread from relations with the United States to Europe. EU officials are talking about it in each visit to China."

 

Both the US and EU are pressing China to relax controls on its currency, the yuan, which they say keep it undervalued making Chinese exports unfairly cheap and pricing competitors out of the market.

 

Beijing regularly counters that it is not intentionally pursuing a large trade surplus, arguing that the flood of cash pouring into the Chinese economy from export revenues is straining the central bank's ability to control pressure for prices to rise.

 

In the past three years China has allowed the yuan to rise gradually against the dollar but some members of the US congress are calling for punitive tariffs on imported Chinese goods unless it takes quicker action.

 

Analysts expect political tension over the issue to rise in the current election year, leading to warnings from treasury officials in both the US and China that a potential trade war is looming.

 

Last month Wu Yi, China's vice premier, told a high-level US trade delegation in Beijing that legislation being proposed in congress would "severely undermine" bilateral relations.