China has reported an unexpected decline in monthly its trade surplus for March 2007, which was down to $6.9 billion (approximately Rs29,607.9 crore) from $23.8 billion in February and substantially below the $20 billion forecast by analysts.

Despite the monthly fall, the trade surplus during the first three months of the year rose to almost $47 billion from $23.3 billion in the first quarter of 2006. (See: China's trade surplus doubles as US moves WTO)

Analysts expect the March figure as a deviation from the constantly rising trade surplus figures being posted by China and believe its trade surplus would register strong growth this year.

Concerns about changes to the export tax laws in March may have led many companies to boost their foreign sales in January and February, contributing to the significant slump in exports last month. Therefore, it is unlikely that this decline in exports would continue in the coming months.

China's rapid economic growth, and huge rate of investment, has been putting pressure on the Chinese economy and the government has recently been taking steps to slow the country's economic growth amid fears of economic overheating.

Analysts say the trade surplus was creating problems for the macro-economic stability of the country and keeping pressure on the currency.