CHINA'S trade surplus widened in June as imports slowed sharply amid a cooling economy and a stalled manufacturing sector.

The trade surplus last month rose unexpectedly to US$22.27 billion, data from the General Administration of Customs showed yesterday.

That compared with May's US$13.05 billion and April's US$11.40 billion.

"The jump in surplus seems mainly to be a result of weakening imports," said Adam Xue, an analyst at CITIC Securities Co.

"The export growth did not have a significant increase, but imports did moderate notably," Xue said.

Zheng Yuesheng, director of the customs agency's statistics department, said exports from China's labor-intensive sectors were gradually losing competitive advantage because labor costs were rising and the yuan kept appreciating against the dollar.

Exports in June expanded 17.9 percent from a year earlier to US$161.98 billion, compared with 19.4 percent a month earlier.

Imports in June advanced 19.3 percent year on year to US$139.71 billion, much lower than the pace of 28.4 percent in May.

In the first six months, China's trade surplus contracted 18.2 percent on an annual basis to sit at US$44.93 billion.

"With China's cooling economy and many uncertainties on the global market, China's trade growth may ease further," Xue said.

China's gross domestic product grew 9.7 percent year on year in the first three months, compared to 2010's 10.3 percent. Growth data for the second quarter will be announced on Wednesday and some economists estimate a rate of 9.5 percent or even less.

China's manufacturing sector has been hit by tightening measures to tame inflation. June's official Purchasing Managers Index, a comprehensive gauge of the vitality of industrial activity, dropped to a 28-month low of 50.9 percent.

Despite easing growth in both exports and imports, pressure for a stronger yuan has not subsided.

The Chinese currency has appreciated more than 5 percent since a year ago when China decided to relax its foreign exchange regime. That ate into the profits of many exporters and drove some smaller ones to the brink of bankruptcy.

In the January-June period, the European Union remained China's biggest trading partner with bilateral trading value of US$265.8 billion, up 21.3 percent from year earlier.

Trade with Japan expanded 19 percent to US$162.3 billion, slower than China's overall average of 25.8 percent due to the Japanese earthquake in March.

Shanghai's trade increased 21 percent on an annual basis to US$207.9 billion in the past six months, slotting into third place after Guangdong and Jiangsu provinces.