China's quarterly trade surplus fell for the first time in three years, an outcome of faster import expansion and weaker demand from overseas markets.

The trade surplus declined 10.2 percent to around US$41.6 billion in the first three months this year compared with a year ago, according to calculations based on trade data of machinery and electronic products released by the Ministry of Commerce today.

Export growth slowed to about 21.4 percent in the first quarter from 27.8 percent in the same period last year while import growth increased 28.6 percent from 18.4 percent in 2007.

The trade surplus in March alone increased to about US$13.5 billion from February's US$8.6 billion after the country recovered gradually from worst snowstorms in five decades. The surplus settled at US$19.5 billion yuan in January.

Weaker overseas demand was fueled by a US economy that is teetering towards recession and a stronger yuan.

The Chinese currency cracked the seven yuan mark for the first time against the US dollar today. It has gained 4.5 percent this year and has appreciated 18.3 percent since China dropped the link to the greenback in 2005.

Domestic consumption has replaced investment and exports as the biggest driver of growth for the first time last year. But some economists cautioned about a rapid drop in export growth over fears it will batter the pace of economic development.

Last year, domestic consumption contributed 4.5 percentage points to GDP growth, compared with 4.2 percentage points from investment and 2.7 percentage points from net exports.