China raises ’06 growth figure

China’s sizzling economy grew even faster in 2006 than previously reported, and its export-fueled foreign reserves have risen to a new high of $1.33 trillion, figures released Wednesday show.

The announcements reflect China’s stunning success but could fuel fears of overheating and prompt Beijing to boost interest rates or tighten economic controls to cool the boom.

China’s National Bureau of Statistics raised its estimate of the country’s 2006 growth rate from 10.7% to 11.1%. It nudged up its estimate of total output to $2.71 trillion, bringing China closer to overtaking Germany as the world’s third-largest economy after the U.S. and Japan.

Chinese leaders welcome strong growth but worry that runaway spending could ignite inflation or leave banks and borrowers with dangerously high debt levels.

China’s trade surplus rose to a new monthly high of $26.9 billion in June, the government reported Tuesday. The flood of export revenue has forced the country’s central bank to drain billions of dollars a month from the economy through bond sales to reduce inflationary pressure, piling up the money in U.S. Treasury bonds and other foreign securities.