China's central bank will gradually ease restrictions on capital flows in a renewed effort to curb its huge trade surplus, according to Wu Xiaoling, deputy governor of the People's Bank of China.

"China will ease cross-border capital transactions selectively and gradually under the precondition of effective risk prevention and intensified capital flow monitoring," Wu told a forum in Mumbai, India.

She said the bank would broaden the overseas investment channels step by step, adding it was actively nurturing a foreign exchange market to provide more investment instruments for foreign currency holders.

The government would also take more measures to boost domestic demand and persuade domestic businesses to import and invest overseas, she said.

China's trade surplus surged almost tenfold to 23.76 billion U.S. dollars in February from the same month last year. The surplus jumped 74 percent to US$177.47 billion last year.

Wu said the foreign exchange rate of China's currency, the yuan or Renminbi, though important, was one of many factors behind the huge trade surplus, adding the main reason was China's economic growth.

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