Chinese shares plummeted on Thursday ahead of the release of a report that showed China's GDP for the first quarter of the year had grown 11.1 percent, 0.7 percentage points higher than in 2006.

The benchmark Shanghai Composite Index was down 4.52 percent, or 163.38 points, to 3,449.02, with a turnover of 189.5 billion yuan (23.7 billion U.S. dollars).

The Component Index on the Shenzhen Stock Exchange ended at 9,857.23 points, slumping 544.39 points, or 5.23 percent.

Having enjoyed an unprecedented highs in recent weeks, investors become "very prudent" ahead of the release of the GDP figure, said analysts.

They feared the government would take greater measures, such as raising the interest rate, to prevent the country's economy from spiraling out of control, they said.

The Shanghai stock exchange saw 716 stocks fall in value, 106 gain value and 70 remain unchanged. The Shenzhen bourse saw 504 losses and 83 gains, with 72 unchanged.

The National Bureau of Statistics (NBS) also reported that the consumer price index, or CPI, a major barometer of inflation, rose 3.3 percent in March compared with a year ago, the highest in 25 months after it hit 3.9 percent in February 2005.

The CPI in the first quarter averaged 2.7 percent, 1.5 percentage points higher than in the same period of last year.

It was a comprehensive problem as to whether the Chinese economy is overheated, said Li Xiaochao, NBS spokesman.

"The GDP-growth indicator alone is not enough," he said.

But Li warned that there existed a risk for the economy to evolve from fast growth to overheating.

Without further regulations, China's GDP growth could exceed last year's level, said Zhuang Jian, economist with the Asian Development Bank. The country's GDP grew by 10.7 percent in 2006.

China will continue to strengthen macro-control measures to solve problems that include excessive liquidity and a huge international payments surplus, said Li.

Source: Xinhua