The equity value of China's stock markets had more than doubled from 3.3 trillion yuan at the end of last year to a record seven trillion yuan (US$875 billion) on Thursday.

The figure is expected to account for 34 percent of the year's gross domestic product, up from 18 percent of last year.

Analysts said the rapid growth was solid evidence for the end of the long detachment of China's stock market from the country's economic growth.

They said the Shanghai and Shenzhen Stock Markets had finally started to function as a barometer of the country's economy.

For much of the past decade, China's stock markets were lacklustre despite the country's rapid economic growth, which was 10.9 percent in the first half and slowed slightly to 10.7 percent in the first nine months.

Analysts attributed the turnaround to the country's shareholder reform which intended to optimize the existing share structure and to float non-tradable shares that were previously barred from trading.

About 90 percent of 1,161 local firms, with a total market value accounting for 96 percent of the total of the mainland exchanges, have adopted the reform.

Given the equity value of stock markets in developed countries often exceeded their gross domestic product, analysts believe China's stock exchanges still have a lot of potential.

Chen Changhua, general manager of the Credit Suisse Group (Hong Kong), even predicted the market value of China's capital market would touch 15 trillion yuan in 2010, about half the country's GDP or four times the figure in 2005.

Apart from the surging equity value, the mainland stock markets also emerged as the world's biggest source of capital for new listings this year, according to Dealogic, a famous data provider.

With a number of blue chips such as the Industrial and Commercial Bank of China, the Bank of China and Air China listed on the Renminbi-denominated A-share markets, the Shanghai and Shenzhen stock markets have so far raised a combined 118.23 billion yuan.

The Industrial and Commercial Bank of China, China's largest bank, for instance, raised 22 billion U.S. dollars, a world record, through a dual listing in Hong Kong and Shanghai.

On Thursday, the benchmark Shanghai Composite Index climbed to 2,071.24 points, a five-year-high, while the Shenzhen Component Index climbed to a nine-year closing high of 5,345.91 points.

(Xinhua News Agency November 28, 2006)