China stocks rise as expanding factory activity boosts recovery hopes

* SSEC 1.1%, CSI300 1.0%, HSI -1.0%

* Caixin PMI shows stronger-than-expected factory activity expansion in July

* Industrial Securities analyst see less uncertainty around policy, liquidity

SHANGHAI, Aug 3 (Reuters) - Chinese shares rose on Monday as new data underscoring strong growth in factory activity bolstered hopes that China's economy has bounced back faster than expected from the shock of the coronavirus outbreak.

** A private business survey released Monday showed China's factory activity expanded at the fastest pace in nearly a decade in July as domestic demand continued to improve after the pandemic, though export orders and employment remained weak. ** At the midday break, the Shanghai Composite index was up 1.08% at 3,345.79 points. China's blue-chip CSI300 index was up 0.98%. ** "Uncertainties around areas like policy and liquidity that have worried investors have disappeared, and the economy is turning from 'deflation' to 'recovery'. If external twists and turns lead to corrections in quality stocks, it is the time to embrace equity and take hold of the 'long bull'," analysts at Industrial Securities said in a note. ** But shares in Hong Kong fell on global concerns over the lack of a new stimulus package in the United States as the outlook for the U.S. economy dims. ** Chinese H-shares listed in Hong Kong fell 0.66% to 9,974.11, while the Hang Seng Index was down 0.95% at 24,362.09. ** The smaller Shenzhen index was up 1.83%, the start-up board ChiNext Composite index was higher by 1.85% and Shanghai's tech-focused STAR50 index, which has been characterised by large swings since its late-July debut, jumped 5.92%. ** Around the region, MSCI's Asia ex-Japan stock index was weaker by 0.56% while Japan's Nikkei index was up 1.96%. ** The yuan was quoted at 6.9743 per U.S. dollar, nearly unchanged from the previous close of 6.9745. ** So far this year, the Shanghai stock index is up 8.52%, while China's H-share index is down 10.1%. Shanghai stocks have risen 10.9% this month. (Reporting by Andrew Galbraith; Editing by Rashmi Aich)