China's merchandise trade surplus has fallen significantly as a share of the country's GDP, said a report by the World Trade Organization Secretariat.

The report was published as part of the fourth review of the trade policies and practices of China. Trade policy reviews are an exercise mandated in the WTO agreements and the review of Chinese trade policies and practices takes place every two years.

China has large bilateral trade deficits with South Korea and Japan, from which it imports components for its export processing activities, and large bilateral trade surpluses with the United States and the European Union, to which it exports final products.

Minister of Commerce Chen Deming said earlier this year that China's trade surplus with the US was overvalued because the added value created by Chinese exports to the US through other economies was counted as China's trade surplus.

Chen added that the processing trade to the US was mainly responsible for the trade surplus with the US — more than $140 billion in 2009 — because Chinese exporters were only in charge of manufacturing rather than designing, transporting and sales, leading to a lower export price than the import price of the US importers.

Ma Xiuhong, former deputy commerce minister, said in March that China's trade surplus doesn't reflect the full picture because trade of services was not included.

China's merchandise trade surplus was $115.1 billion in 2011, but the country's trade surplus would be much smaller if the service trade deficit — around $60 billion in 2011 — and China's huge consumption abroad were taken into consideration.