BEIJING • China's trade surplus with the United States expanded last year, raising the possibility of fresh blowback from President Donald Trump, who has slammed Beijing over the issue, leading to fears of a trade war.

The increase came despite a tumble in China's global surplus, as domestic demand spurred a rally in imports. The figures yesterday showed the difference between exports and imports with the US expanded 10 per cent to US$275.8 billion (S$367 billion).

Trade between the two countries has become a sensitive issue, with the US President hitting out at what he considers unfair practices by Beijing and accusing it of killing US jobs.

But while Mr Trump has repeatedly threatened to take retaliatory action against China if it does not narrow the gap, he has so far held back. During his November visit to Beijing, the two countries announced more than US$250 billion in business deals. The increasing surplus is likely to give impetus to calls for tough measures.

The US is expected to release the results of a major investigation into China's intellectual property practices this year.

China has so far resisted taking major retaliatory action against American imports despite a volley of new duties and investigations from the White House. But historically, it has responded to new US tariffs with tit-for-tat measures.

"A major uncertainty is potential China-US trade frictions," Mr Ding Shuang, chief economist for Greater China and North Asia at Standard Chartered in Hong Kong, told Bloomberg News.

Yesterday's report from the General Administration of Customs showed China's exports expanded 7.9 per cent while imports soared 15.9 per cent.

The humming global economy helped propel China's trade, giving its leaders time to achieve their goal of transitioning the economy from one driven by exports and investment to a more stable model propelled by domestic consumption.

A plunge of 33 per cent in imports from North Korea last year - including a 81.6 per cent drop in December - will likely help temper Mr Trump's anger. The US President has connected the issues a number of times.

The December data shows China has implemented a series of UN Security Council resolutions this year, targeting the North's most profitable exports.

In 2016, China accounted for roughly 90 per cent of North Korea's trade. China's exports to the rogue nation did expand 8.3 per cent last year, but it has drastically cut its reported oil shipments in recent months.

AGENCE FRANCE-PRESSE