SHANGHAI - Stocks on the Chinese mainland rose to the highest level in 11 weeks as investors speculated the Chinese government will adopt more measures to ease a credit crunch.

Gansu Qilianshan Cement Group Co jumped to the highest in almost three months, pacing gains among companies based in western China, after the government approved a plan to accelerate the region's development.

"There will be more policy easing and more liquidity will be released into the economy," said Wei Wei, an analyst at West China Securities Co in Shanghai. "It still remains to be seen if these policies will be effective in stemming a slowdown in the economy."

The Shanghai Composite Index climbed 17.8 points, or 0.8 percent, to 2381.43, the highest since Dec 1. The CSI 300 Index rose 0.9 percent to 2562.45.

The Shanghai Composite has rebounded 8.3 percent this year on expectations the government will ease monetary policy to bolster economic growth that slid to the slowest pace in two-and-a-half years in the fourth quarter of 2011.

The Shanghai index trades at 9.8 times estimated earnings, compared with a record low of 8.9 times on Jan 6, according to data compiled by Bloomberg.

Concerns about China's economic slowdown intensified after January data showed exports and imports falling for the first time in two years, new lending was the lowest for that month in five years and money supply grew the least in more than a decade. China's expansion may be cut almost in half if Europe's debt crisis worsens, the International Monetary Fund said in a Feb 6 report.

China will continue to implement proactive fiscal and prudent monetary policies this year as it adjusts the policies "slightly" to make them more targeted, flexible and forward-looking, the Xinhua News Agency reported on Monday, citing a statement from a meeting attended by members of the Politburo.

The seven-day repurchase rate, a gauge of funding availability in the financial system, fell 12 basis points to 5.25 percent as of 3:26 pm in Shanghai, according to a weighted average compiled by the National Interbank Funding Center.

China has cut the amount of cash that banks must set aside as reserves, the second cut in three months, to spur lending. Reserve requirements will fall by 50 basis points on Friday, the People's Bank of China said on Saturday.

"On the margin, policy will ease slightly and that will provide an additional boost to Chinese equity markets," said Manpreet Gill, senior investment strategist at Standard Chartered PLC.

The government plans to put 15,000 kilometers of new rail lines into service in western China by 2015, Xinhua reported on Monday, citing a State Council statement. The economies of the western region will expand at a faster pace than the national average in the period ending 2015, according to the statement.

Bloomberg News