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Shanghai Composite +1.7%; Hang Seng -0.4%

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Property, construction stocks lead

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Yuan -0.1% to 7.0743/dollar; bonds steady

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Investors welcome authorities' policy priorities

(Updates prices to midday break)

By Samuel Shen and Tom Westbrook

SHANGHAI/SINGAPORE, Oct 14 (Reuters) - China's stock

markets pressed ahead in volatile trade on Monday as stimulus

promises lifted property shares, though without re-igniting the

euphoria of late last month.

The Shanghai Composite and blue chip CSI300

were each more than 1.5% higher by the midday break,

adding $146 billion in market value. However, Hong Kong shares

were bumpy, swinging the Hang Seng 0.4% lower in heavy

trade.

China's financial markets have been on a rollercoaster ride

since late September when a series of rate cuts, news reports

and announcements raised expectations of a major government

rescue effort for China's ailing economy.

At a Saturday news conference Finance Minister Lan Foan

reiterated plans to help, promising to raise government debt and

use the proceeds to drive growth.

Even though he did not spell out exactly how much the

government will spend or how quickly, there was enough in his

tone to keep markets broadly encouraged and real estate shares

in particular went up in Hong Kong and the mainland.

"The Chinese government is playing the long game here," said

Joseph Lai, chief investment officer at Ox Capital in Sydney.

"There is now a resolve and drive to deliver steady growth

for the economy. In this sense, this is better than the

government floating up a number to please folks in the next two

months."

China's yuan fell about 0.2% to while five-year

government bond futures were broadly steady.

The CSI300 real estate index rose 4.1% and the

construction-engineering index was up 3.4%.

Healthcare and consumer staples shares

were more muted but recovered early losses to notch small gains.

GROWTH BOOST

China's long slump in consumer confidence and the property

sector is a by-product of a drive by the Communist Party

leadership to reduce debt and root out corruption. Debt

restructuring and borrowing promises have encouraged investors

that generating growth is top of mind for policymakers.

Goldman Sachs estimated that measures announced on Saturday

and last week would possibly add 0.4 percentage points to growth

next year, and the bank's analysts upgraded a 2025 real GDP

growth forecast from 4.3% to 4.7%.

The CSI300 is up more than 20% since a slew of policy

announcements began on Sept. 24 and investors say furious gains

may be giving way to a more steady market.

"China needs a slow bull, not a crazy one, which will

eventually burn retail investors," said Yuan Yuwei, founder and

CIO of Water Wisdom Asset Management.

"The Ministry of Finance officials were basically saying: I

still have cards up my sleeves, but I'm not showing them now."

Global commodity markets from iron ore to other industrial

metals and oil had a mixed morning, with iron ore futures higher

in China and Singapore but the yuan and Australian

dollar under pressure.

Weekend data showed inflation slowing and producer price

deflation deepening, while a raft of figures due this week -

including gross domestic product - are seen likely to be soft

and add pressure on Beijing to act quickly.