you probably need more chainslack, but i doubt thats the thing making the sound.
Sit on the rear of the seat, or lean over the bike from behind (heh) putting all you're weight in it, there should still be 1 inch freeplay.
The chain is at its tightest position when the swingarms is perfectly horizontal, and thats where you should make sure to have some freeplay.
Its very easy to make the chain too tight on theese kind of bikes.
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