China's yuan is a source of contention for US critics

Demand from Europe and the US boosted exports despite cuts in tax rebates aimed at curbing its export boom.

China has now exceeded the record surplus of $177.47bn set in 2006, with the busiest final quarter for exporters in the Christmas run-up still to come.

The surplus may provide ammunition for US critics who say China is keeping its currency low to benefit its exporters.

Product recalls

Soaring imports of Chinese goods into the US have led to demands in Congress for legislation to penalise China for its currency controls.

China has let the yuan rise by around 8% since it revalued the currency in July 2005, and decoupled it from the US dollar.

However, many analysts believe the currency remains undervalued given China's big external payments surplus and strong productivity growth.

Exports in September rose 22.8% year-on-year to $112.5bn, while imports were up 16.1% at $88.6bn.

The accumulated trade surplus for the period from January to September is now $185.7bn.

This was despite a number of safety scares over the month, including recalls of toys and children's cots.

Zhang Yansheng, a director at the Institute of International Economic Research in Beijing, said: "China's foreign trade surplus will continue to rise for the foreseeable future.

"For instance, China's growing high-tech exports are mainly generated by foreign-invested firms, and, according to our study, these investors are unlikely to change their current business model."