PUTRAJAYA, Malaysia (Reuters) -- China trades fairly with the rest of the world and is pursuing a balance in its external trade, Commerce Minister Bo Xilai said on Friday.

He said that rather than pursuing big trade surpluses with other countries Beijing is trying to narrow its trade surplus. China is under strong pressure from Washington and Brussels to cut its trade surplus, which rose 74 percent last year to a record 177.5 billion dollars and has climbed more than 80 percent in the first six months of 2007 from the same period a year earlier. "Yes, indeed the trade surplus is here in China, but the real profits and benefits are actually in Europe and the United States," Bo told reporters in Malaysia's administrative capital of Putrajaya after witnessing a loan signing for a Malaysian bridge project. He said Chinese exporters only make small profits as their products, though of good quality, are inexpensive. "China has always continued fair business with the rest of the world," Bo said. "The Chinese government does not pursue any big trade surpluses with other countries. What the Chinese government is pursuing is a balance in our external trade." China has cut export tax rebates and raised export taxes for high-polluting and energy-intensive products in an effort to trim the trade surplus. On June 1, Beijing began imposing taxes of between 5 and 10 percent on exports of more than 80 types of steel products