It's no surprise that China's economy has been a global MVP--one of the few large economies to grow over the last year. But is it now overheating? China's export machine surged in December, according to government data released Sunday, with exports rising 17.7% year-over-year, well past forecasts for 4% growth. Bank loans also rose sharply in the first week of January to $88 billion, nearly twice the monthly average in the second half of 2009. And car sales rose 88.7% in December from a year earlier, helping China pass the U.S. as the world s largest car market.

All this has raised concerns about Chinese inflation, which is now expected to hit 3%-4% in the next few months, following growth of just 0.6% through the first 11 months of 2009. That could soon mean higher Chinese interest rates. Though Chinese Finance Minister Xie Xuren said Sunday that "active fiscal policies will continue" in 2010.

China s stimulus policies have helped lift consumption and spending--and boost demand for commodities, especially metals used for construction and manufacturing. China's iron-ore imports were near-record highs in December, and continued strong demand could boost big global miners such as BHP Billiton (BHP), Vale (VALE) and Rio Tinto (RTP) (though these stocks are already trading near 52-week highs). Chinese demand has proven critical to helping commodity-exporting nations like Australia weather the global recession, according to Stephen Walters, chief Australia economist for JP Morgan. Question now, is whether it can continue.

Indeed, any slowdown of Chinese manufacturing would be felt widely in the commodities market. Trade figures on Sunday showed that imports in December jumped 55% to $112.3 billion from a year earlier with oil and other commodity imports soaring. And many analysts chalk up the rise in commodity prices over the last year to China s insatiable demand.

This article is an excerpt from our Early Bird markets story, which was originally published the morning of Jan. 11.