CHINA'S foreign-exchange reserves rose to a record US$1.46 trillion in October.

This increases the risk of economic overheating as the soaring trade surplus pumps cash into the financial system, Bloomberg News reported.

Zhang Xiaoqiang, deputy head of the National Development and Reform Commission, gave the October 31 figure at an investment conference in Beijing yesterday.

The reserves, the world's biggest, were US$1.43 trillion a month earlier.

The trade surplus jumped to US$27 billion last month, stoking tensions with the United States and Europe and threatening to fuel decade-high inflation. China's government has urged banks to rein in lending and this month raised the proportion of deposits that they must set aside as reserves for the ninth time this year, to 13.5 percent.

"The rapid increase in currency holdings remains a concern," said Sun Mingchun, an economist with Lehman Brothers Inc in Hong Kong. "Banks' reserve requirements may increase to as high as 17 percent next year."

The reserve ratio is the amount of non-lending cash banks must set aside with a central bank. It was nine percent at the start of the year.