BEIJING -- China socks closed mixed Tuesday, with Hong Kong's Hang Seng Index falling 0.1% to 16,044, while the Shanghai Comp added 0.1% to 1684.

China shares saw selling pressure in New York on Monday. eLong ( LONG) traded down 2.1% to $14.35; Tom Online ( TOMO) fell 7.8% to $12.73;and KongZhong ( KONG) slipped 7.7% to $6.04.

Beijing reported Tuesday that China's economy grew at a blistering 11.3% in the second quarter -- the fastest growth in over a decade, or since the first quarter of 1995.

The second quarter growth rate, led by exports and fixed-asset investment, stood well above consensus expectations for a 10.4% year on year increase in GDP.

The results also marked an acceleration from first quarter growth of 10.3%.

The economic report bolstered the case for further monetary tightening, which a number of analysts had already speculated was in the offing. It could also increase pressure on Beijing to allow the Chinese currency, the yuan, to appreciate against the dollar. That would have the effect of slowing exports and thus reducing foreign currency inflows into the Chinese economy.

A major source of concern in the new numbers was fixed asset investment, which soared 29.8% year on year in the first half of 2006, up from 27.7% in the first quarter of the year.

In a statement, Zheng Jingping, a spokeman for the National Bureau of Statistics, acknowledged investment in fixed assets as well as lending growth were excessive.

Meanwhile, China's trade surplus fattened to a record $38 billion in the second quarter, compared to $23 billion a year ago.

"I'm not so worried about GDP growth itself, but I am worried about investment growth, credit growth and the trade surplus," said Dong Tao, chief Asia economist for Credit Suisse First Boston. He said a 27-basis-point interest rate hike is "very likely and probably imminent," with an additional 27 point hike possibly in store by year's end.

Given the extent of excess liquidity in China, Tao added, "A little bit of tightening in interest rates at this stage probably will not have too much impact on the economy." He said the government, which still effectively controls the four biggest state banks, might take further administrative measures to slow loan growth -- a step that "might be more relevant" by targeting one of the government's chief concerns. Tuesday's report shows the "overinvestment problem" is getting worse, said Citigroup Asia economist Yiping Huang. "That could lead to problems like excess capacity, deflationary pressure and the possibility of bad debt."

China has been trying to give a fillip to domestic consumption while slowing outsized levels of investment in fixed assets, which have contributed to property speculation and rising commodity prices. Some economists said Tuesday's results show earlier government efforts to dampen growth have failed to take hold. Authorities increased interest rates by 27 basis points to 5.85% in April, then increased banks' reserve requirement ratio by 0.5 percentage points to 8% in June.

"The fact that the economy didn't slow down means they were not that effective, so I think the government would probably look at taking further steps," Huang said.

Among the policy prescriptions he thinks likely are a lending rate hike of 25 basis points and faster appreciation of the renminbi (RMB).

On the second point, Huang believes the extent of the liquidity problem is sufficient to require RMB appreciation against the dollar on the order of 7.5% this year. That's a relatively aggressive expectation, given most economists are predicting the yuan will rise in value somewhere in the 3% to 5% range.

On the economic front, however, he and others believe the pace of GDP growth in China will probably start to ebb in the second half of the year.

Part of that owes to an outlook for less robust growth in the U.S., which buys 22% of China's total exports, according to Huang. Exports, in turn, account for over 30% of China's GDP.

Seconding that view was Lehman economist Rob Subbaraman. "We firmly believe that Q2 was the peak for China's growth this year," he said in a note.

Unlike some other market watchers, he said there are reasons to think earlier tightening measures are having some effect, based on more timely indicators such as money supply growth, loans and imports. GDP is a "backward looking indicator," he pointed out.

But he likewise expects more tightening in the coming months as policymakers wrestle to get growth under control.