Jan. 11 (Bloomberg) -- China's CSI 300 Index climbed for a third day, completing its fourth straight weekly gain. China Minsheng Banking Corp. and China Vanke Co. led financial shares higher on expectation a stronger yuan will spur demand for yuan- priced assets.

``An accelerating yuan appreciation has provided investors with an extra excuse for buying banking and developer stocks, whose earnings outlooks seem quite solid,'' said Sun Chao, an analyst at Citic Securities Co. in Shanghai.

Equities also gained after China's trade surplus narrowed for a second month, suggesting the government might not take further measures to cool the economy and soak up liquidity.

Metals stocks including Aluminum Corp. of China Ltd. declined on concern the imposition of a new resources tax will erode earnings.

The CSI 300 Index, which tracks yuan-denominated A shares listed on China's two exchanges, rose 26.99, or 0.5 percent, to 5,699.15 at the close, the highest since Oct. 17. It has gained 3.9 percent this week.

The gauge is the region's best performing this year, having gained 6.8 percent and taken China's total market value past Japan's for the first time. It soared 162 percent last year.

The yuan rose as much as 0.12 percent to 7.2630 against the dollar in Shanghai today, the strongest since it ended a link with the U.S. currency in July 2005.

Minsheng Banking, China's only privately controlled lender, rose 0.71 yuan, or 4.6 percent, to 16.22. Vanke, the nation's biggest listed property developer, gained 0.51 yuan, or 1.7 percent, to 31.06. China Merchants Bank Co., the country's largest dual-currency credit-card issuer, climbed 1.84 yuan, or 4.5 percent, to 42.94.

Rising Income

Bank of Beijing Co., China's biggest city bank, gained 0.29 yuan, or 1.3 percent, to 22.25. The lender said net income last year probably rose more than 50 percent from a year earlier when it reported profit of 2.1 billion yuan ($289 million).

Japan's worst start to the year in more than a decade meant China overtook it as the world's second-largest stock market by value on Jan. 4. China's total stock market capitalization was $4.7 trillion as of yesterday, compared with $4.4 trillion for Japan, according data compiled by Bloomberg.

The Nikkei 225 Stock Average has declined 7.8 percent so far this year, the worst beginning since 1997. The U.S. stock market remains the world's largest by value with a total value of $16.9 trillion.

China's trade surplus for December fell to $22.7 billion from $26.2 billion in November, the nation's customs bureau said today. Export growth slowed to 21.7 percent from 22.8 percent the previous month.

New Resource Tax

Aluminum Corp. of China, the nation's biggest maker of the lightweight metal, also called Chalco, fell 0.65 yuan, or 1.5 percent, to 42.81. Qinghai Salt Lake Potash Co., a producer of potassium chloride products, dropped 4.19 yuan, or 4.8 percent, to 83.51. Jiangxi Copper Co., China's second-biggest producer of the metal, retreated 1.75 yuan, or 2.9 percent, to 59.02.

China may announce details of a new system for taxing resources this year to cut pollution and boost energy efficiency, the official Xinhua News Agency reported yesterday, citing Yang Suizhou, a vice director of the tax department at the State Administration of Taxation.

The administration is revising an earlier proposal to meet requirements set by the State Council, according to Xinhua's report. The government plans to expand the category of taxable resources, and may shift to base tax on price rather than volume, it said.

``The introduction of the new taxation on resources is part of the government's effort to cool down the economy,'' said Citic Securities' Sun. ``That will negatively impact metals shares in either profitability or demand.''

The Shanghai Composite Index, which tracks the bigger of China's stock exchanges, rose 0.5 percent to 5,484.68. The Shenzhen Composite Index fell 0.1 percent to 1,554.04.

To contact the reporter on this story: Zhang Shidong in Shanghai at szhang5@bloomberg.net

Last Updated: January 11, 2008 03:57 EST