Big fall in China's trade surplus

China's trade surplus unexpectedly fell in February, suggesting the US slowdown is hitting demand for Chinese goods.

China exported $8.6bn (£4.3bn) more than it imported last month, down from $23.7bn in February last year, according to government figures.

But economists warned that February data are very sensitive to the timing of China's lunar new year celebrations.

There was more concern that factory gate prices had risen 6.6% in the year to February.

Factory gate prices measure the amount that manufacturers are paid for their products and is a key indicator of consumer inflation to come.

Premier Wen Jiabao told parliament last week that the battle against inflation is his top economic priority for the year.

"Virtually everything is on the rise - not just fuel, but coal and iron ore," said Jun Ma, chief China economist at Deutsche Bank in Hong Kong.

"All these things are growing much stronger than fuel, plus labour costs are going up too."

Consumer prices figures are due out on Tuesday.

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