China's economy has grown by an annual rate of 11.1% in the first three months of 2007, official figures show, fanning fears it is starting to overheat.
Beijing has tried to restrict bank lending to cool the economy
First quarter growth topped forecasts and was significantly up on the 10.4% rate in the final three months of 2006.
Separate figures showed annual inflation rose to 3.3% in March.
China's main share index closed 4.5% lower amid concerns interest rates will have to rise to slow inflation because earlier measures have largely failed.
The drop was the biggest since an almost 9% slump on the Shanghai stock exchange earlier this year prompted a global sell-off that shook markets in Europe, Asia and the US.
"Investors are worried the government may take serious steps to rein in the economy, such as an interest hike plus some administrative measures," said Xu Yinhui, a fund manager at Guotai Junan Securities.
Copper prices fell 4% in Shanghai as investors anticipated government attempts to slow the economy could impact on demand for raw materials.
Interest rates have risen three times in the past year and the government has pursued other measures to try and prevent the economy from overheating such as limiting bank liquidity and credit lending.
Despite that, investment in fixed assets - which includes state spending on construction projects - rose 25% in the first three months of the year.
The economy has grown by more than 10% in each of the past four years, on the back of high government spending, rising exports and increased foreign investment.
The environmental cost of China's growth is clear to see
However, government officials have begun to express concerns publicly at the pace of growth and its consequences.
A government official said recent growth had been "steady" but acknowledged the economy was facing a series of problems including excessive liquidity, a lopsided balance of payments and environmental damage.
"We will adhere to the scientific approach to development, speed up structural adjustment and change the pattern of economic growth," said Li Xiachao, from the National Bureau of Statistics.
The BBC's Quentin Sommerville in Shanghai said this spectacular growth had come at a major environmental cost with China's cities among the most polluted in the world.
Fears that the Chinese economy may be overstretching itself reverberated around world stock markets.
Japan's main share index falling more than 1.5%, its largest daily drop in more than a month while markets fell in Frankfurt, Paris and London.