SHANGHAI, Aug. 16 -- CHINA'S spending on factories, equipment and property rose 26.6 percent in the first seven months of this year from a year earlier.

Fixed-asset investment in urban areas climbed to 5.67 trillion yuan (US$747 billion), the National Statistics Bureau said today.

That was close to the 26.7 percent increase for the first six months and more than the 24.5 percent growth for all of 2006.

The world's fourth-largest economy expanded 11.9 percent in the second quarter from a year earlier, the fastest pace since 1994, on exports and investment. The trade surplus rose 67 percent in July from a year earlier to US$24.4 billion, the second-highest on record.

Besides raising the benchmark one-year lending rate to 6.84 percent, the central bank has ordered lenders to set aside larger reserves on six occasions this year and regularly sells bills to soak up cash. The government also plans to sell 1.55 trillion yuan of bonds as part of managing foreign-currency reserves that have swelled to a world record US$1.3 trillion.

Investment by non-ferrous metal companies rose 34.8 percent in the first seven months from a year earlier, the statistics bureau said. Spending by companies producing non-metal minerals jumped 48.8 percent. Investment in property development climbed 28.9 percent.

Investment accounted for 42.7 percent of China's gross domestic product in 2006. That compared with 23.9 percent in Japan, 20.2 percent in the US and 17.4 percent in Germany, according to the International Monetary Fund.

Chinese banks extended 2.8 trillion yuan of new loans in the first seven months, an 18 percent increase from the same period on a yearly basis.

Preventing overheating is the top economic policy goal for the second half of the year, according to the National Development and Reform Commission, China's chief planner, and the central bank.

The government has restricted project approvals, curbed land use, imposed environmental rules, cut export rebates and tried to slow investment in industries with excess capacity including steel and cement.