Inflation remains low, despite China's red hot economic growth

The $10.46bn (�4.3bn) surplus was down from $11.2bn in March, though it rose from $4.6bn a year earlier, China said.

The news came two days after the US Treasury acknowledged China was not deliberately keeping the yuan low to boost exports and growth.

But it expressed disappointment the currency was not traded more freely.

For the first four months of 2006, the trade surplus totalled $33.8bn, up 60.2% from the same period a year.

Exports increased 25.8% to $274.2bn while imports rose 22.1% to $240.4bn.

Inflation rises

The Beijing think-tank China Stock Exchange Council predicted the full year surplus would exceed $130bn.

The trade figures showed copper and aluminium imports were each down about 20% in the first four months of 2006 from the year before.

Similarly, April saw crude oil imports slip for the first time in 2006.

Inflation rose slightly to 1.2% in the year to the end of April, up from 0.8% the month before.

"This is still pointing to a benign inflationary environment in China," said Tai Hui of the Standard Chartered Bank in Hong Kong.

Last year, China revalued its currency allowing it to float against a basket of currencies, rather than linking it at a fixed rate to the dollar.

But some US politicians claim the yuan is artificially undervalued, allowing China to keep its export prices low.