The benchmark Shanghai Composite Index rose 2.2 percent to close at 4,287.3 points today, as stocks climbed to their highest levels in seven years.

"The government has remained positive toward the stock market, which is the biggest push for this rising streak," Sun Xiwei, analyst of CITIC Securities told China state news agency Xinhua.

Like Us on Facebook

On Friday the Shenzhen Component Index gained 1.3 percent to close at 14,149.34 points. Total turnover on the two indices amounted to 1.53 trillion yuan, or $25 billion.

The rise was led by ship making, oil refineries and infrastructure. Arms producers also rose as the Ministry of Industry and Information Technology announced that it will guide private capital into the previously closed military sector, reports Xinhua.

Companies related to nuclear power rallied as the State Council this week approved construction of nuclear power units using domestic technology.

Xiao Gang, head of the China Securities Regulatory Commission, warned on Thursday of latent risks in the market and advised share holders to invest calmly and cautiously. However, Central Bank Governor Zhou Xiaochuan said last month that capital inflow in the stock market is good for the real economy.

In other financial news, China is no longer the top foreign holder of U.S. treasury bills. Japan's holding stood at $1.2244 trillion in February, while China trimmed its holding to $1.2237 trillion, the U.S. Treasury department said in the latest Treasury International Capital report.

In 2008, China overtook Japan as the top holder when the debt-ladden US government increased borrowing to finance its deficit.

TagsShanghai Stocks Hit Seven-Year High; Japan Passes China as Largest Foreign T-Bill Owner, Shanghai Composite, Sun Xiwei, Citic Securities, Shenzhen Component