China's equity market has reached such a frenzy of irrational exuberance that Chinese authorities are not the only ones sounding warnings about the market becoming overheated.

China's benchmark Shanghai Index soared 130% in 2006 and, since the February correction, is up another 40%. The nation's economy rose 11.1% in the first quarter and 10.4% in the previous quarter, while China's trade surplus is double what it was a year ago.

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