CHINA's trade surplus expanded in October, but was lower than expected because of declining imports and exports, reports the Wall Street Journal.

The surplus rose to US$17.03 billion, up from US$14.51 billion in September but less than US$25.8 billion indicated by Dow Jones' survey of economists. Exports fell 7.2 per cent from September levels while imports dropped 9.5 per cent.

Year-on-year, export growth slowed from September levels while import growth accelerated.

"China's export growth will continue to slow, and the trade-surplus growth will stay on a declining trend," said Royal Bank of Scotland economist Cui Li. Societe Generale economist Yao Wei said he expects China's overall surplus for 2011 to be US$160 billion, down 12 per cent year on year.

Mr Li also said the declining trade surplus may encourage further appreciation of the yuan.