China's trade surplus should not be used as an argument in favour of letting the yuan appreciate, Commerce Minister Chen Deming said on Thursday.

China has reduced its surplus to around 5 percent of GDP, and the surplus in the first two months of the year was half the size it was in the same period last year, Chen noted.

The 45.7 percent year-on-year rise in exports in February, reported on Wednesday, was mainly due to a low base of comparison in 2009 and to post-Christmas replenishing of inventories, he added.

So we should be more cautious about the outlook for trade, Chen told reporters during the annual session of parliament.

He said rising inflation, imported via global commodity prices, was China's major policy concern this year.

Earlier on Thursday the government reported that consumer price inflation quickened to 2.7 percent in the year to February from 1.5 percent in the 12 months to January. [ID:nTOE629085]

The government has set a 3 percent inflation target for 2010. (Reporting by Aileen Wang and Alan Wheatley; Editing by Ken Wills)

China