Shanghai's composite index rose 0.59 per cent to 1,569.208 as turnover expanded to 16.2 billion yuan (US$1.9 billion) from Tuesday's 12.4 billion yuan (US$1.5 billion).

Shenzhen's benchmark sub-index closed 1.22 per cent up at 3,150.97.

China's target for gross domestic product (GDP) growth this year was 7 per cent, still robust although down from 7.3 per cent in 2001, China's top State planner Zeng Peiyan told the National People's Congress in Beijing yesterday.

"There are signs that China's economy will keep good momentum this year, pushing some investors to build long positions," said analyst Huang Xiaopeng of Qinghai Securities.

"Punters also believe there are a lot of opportunities to make profits in the near term, although the long-term prospects of the stock market are still difficult to predict," he said.

Shanghai's rose 0.27 per cent to 148.228 as turnover expanded to US$80.6 million from a moderate US$63.8 million on Tuesday, an indication of fresh liquidity inflow.

Shenzhen's B index closed up 1.15 per cent at 230.18 points on volume which surged to HK$467 million (US$59 million) from HK$323 million (US$41 million).

Speculation was rampant in loss-making companies as sentiment improved on the third day of a broad market rally, brokers said.

Motorcycle maker North Jianshe, which has forecast a loss for 2001, soared 9.2 per cent to HK$3.80 (US$0.49) on heavy volume of 3.88 million shares and was the top B-share performer.

Agricultural machinery maker Worldbest Kama, also expecting a 2001 loss, was Shanghai's volume leader and biggest gainer, rising 3.25 per cent to US$0.635 with a heavy 11.72 million shares changing hands.

B shares are open to foreigners and Chinese citizens.

Markets jumped more than 3 per cent on Tuesday.

About two-thirds of China's US$500 billion market capitalization is non-tradable shares held mostly by the State or State-owned institutions.

The government has said it plans to sell down these stakes to raise money for a cash-strapped national social security fund, spreading fears around the market that a selldown would drain liquidity from existing shares.

Analysts said they expected a consolidation today but saw room for more gains afterwards.

"Share prices are likely to continue to rise if profit-taking pressure can be digested in an expected consolidation tomorrow," said analyst Liu Ai of Southwest Securities.

The domestic A shares of Chinese steel firms shrugged off a decision by the United States to impose hefty tariffs on a range of steel imports. Analysts said exports by Chinese steel makers to the United State were limited.

China's biggest steel giant Baoshan Iron and Steel edged up 0.24 per cent to 4.16 yuan (US$0.50). A company spokesman said its exports to the United States account for only a small percentage of total sales.

Domestic A shares in another steel heavyweight, Beijing Shougang, ended up 0.81 per cent at 7.51 yuan (US$0.90).

(China Daily March 7, 2002)