By David Turner in Tokyo and Neil Dennis in London
Friday, January 26, 2007
 
Chinese shares dropped sharply yesterday after the government warned against excessive strength in the economy as gross domestic product expanded at its fastest annual rate in 11 years.

The Shanghai Composite index dropped 4 per cent to 2,857.36, while the China Enterprises index of H shares – Hong Kong listed shares of mainland companies – fell 1.5 per cent to 9,864.31.

GDP in 2006 powered ahead at a rate of 10.7 per cent, the fourth successive year of double-digit growth, in spite of measures to cool the economy.

Brokers warned that a spell of cautious trade was likely following the market's recent strength.
 
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