The Chinese economy has expanded by 11.4% over the past year, reaching its fastest growth rate in 13 years, officials have announced.
Building and infrastructure projects are fuelling economic growth
Increased exports and a boom in the construction industry helped the rapid expansion during 2007.
But officials warned that overheating remained a danger, despite a slight slow-down in the fourth quarter.
Inflation is also a serious concern, with many Chinese people hit by recent dramatic increases in food prices.
Announcing the figures, National Statistics Bureau chief Xie Fuzhan said Beijing was paying "close attention" to the US credit crisis.
He said Beijing would respond by making "timely and proper adjustments" in exchange and interest rate policy, but gave no details.
Speculation has been mounting among analysts over whether China has overtaken Germany to become the world's third-largest economy.
But Mr Xie played down the comparison, saying: "It's not really important to know whether China is the fourth-largest or the third-largest.
"Even if the total surpasses Germany, China is still a developing country - in particular, the per capita GDP of China is really low."
The BBC's Quentin Sommerville, in Shanghai, says economic growth is not a problem in China, but keeping the ever-expanding economy under control is proving tricky.
It took six interest rate rises by the government last year to slow the expansion. The last quarter of 2007 saw growth ease to 11.2%.
But while other governments around the world are cutting interest rates, China will likely have to raise them again if it is to keep its economy growing at a sustainable level, our correspondent says.
Another headache for Beijing last year was inflation.
Despite its growing wealth, China still has a large number of poor people struggling with dramatic increases in the price of daily essentials such as pork, which jumped by 50%.
Inflation hit an 11-year year high in November. Thursday's figures show that it fell back in December, although at 6.5% it remains a worry.
The government has introduced a range of price controls recently aimed at bring the cost of ordinary goods, particularly food, under control.
Dramatic price rises have led to social unrest in the past and Beijing cannot afford for its millions of poor to go hungry.