China will strive to reduce its " excessively large" trade surplus to ensure the sustained development of both domestic economy and foreign trade, said Premier Wen Jiabao Monday in a report to the National People's Congress.

China recorded a sizzling economic growth of 10.7 percent in 2006, largely powered by strong exports, which rose 33 percent to 86.62 billion U.S. dollars.

Despite a slight 1.2 percentage points down in export growth and 2.4 percentage points up in import growth, China's trade surplus last year expanded to a record 177.5 billion dollars, up 74 percent from the previous record of 101.9 billion dollars set in 2005.

The surplus kept surging 67.3 percent in January from a year ago to 15.88 billion U.S. dollars, a dangerous level to ignite inflation and aggravating already tense trading relations between the world's fourth largest economy and its major trade partners, which press China for further currency appreciation.

To reduce the hefty trade imbalance, the premier said the government will support export of high value-added products and products with Chinese trademarks, promote the upgrading of the processing trade and expand the export of service and agricultural products, while limiting exports of products whose manufacture is highly energy consuming or highly polluting.

For the part of imports, Wen stressed that imports of energy, raw materials, advanced technologies and equipment, and key spare parts and accessories will be bolstered.

The premier promised China will keep improving the mechanism for setting the Yuan exchange rate, easing the imbalance in international payment and optimizing foreign investment environment.