The middle-aged crowd in the packed Guosen Securities office jostle around buzzing printers that spit out receipts for their share buys, hoping to cash in on China's stimulus-fueled stock market boom.
"The central government has to fulfill their promise of 8 percent economic growth," said Wu Jun, 62, a retired civil servant who invested part of his life savings of 50,000 yuan ($7,300) and lives on a 2,000 yuan-a-month ($290 a month) pension. "They'll come up with measures to keep the market in good shape."
But while investors expect the market — up more than 80 percent this year — to keep rising, Chinese leaders are alarmed. They worry that too much of the $1 trillion lending binge by state banks that paid for China's nascent revival was diverted into stocks and real estate, raising the danger of a boom and bust cycle and higher inflation less than two years after an earlier stock market bubble burst.
Beijing is trying to tighten credit controls without derailing the economic revival or causing a market crash — a risky path at a time when Chinese leaders say a recovery is not firmly established.
"It's a very serious threat. The Chinese government is walking a tightrope," said Mark Williams, Asia economist for Capital Economics in London. "There is the question of what happens if they rein in lending, because there is really no strong evidence that private sector demand is picking up."
Any hiccup in China's recovery could dent its rising demand for imported industrial raw materials and consumer goods, damaging hopes it might lead the global economy out of its worst downturn since the 1930s.
China's growth accelerated in the latest quarter to 7.9 percent over a year earlier while the United States and Europe struggle with recession. The surge was driven by Beijing's 4 trillion yuan ($586 billion) plan to insulate China by pumping up domestic demand with heavy spending on building highways and other public works.
But the growth — up from 6.1 percent in the previous quarter — highlighted China's continued reliance on stimulus spending. The big gains were in construction and other stimulus-fueled areas, while retail spending and other private sector activity lagged.
Bank credit soared to a record 7.1 trillion yuan ($1.1 trillion) in the first half of the year and the rate of lending is accelerating. Loans in June expanded to more than double the May level at 1.5 trillion yuan ($220 billion).
Economists say as much as 15 percent or 1 trillion yuan ($145 billion) of that money has been diverted into stocks and real estate despite government rules that say banks should lend only for productive investment.
The Finance Ministry says it found some companies played the market with money borrowed for stimulus projects. It gave no details but Chinese companies frequently are accused of violating China's already lax financial controls by diverting money from borrowing or their core business into stocks in hopes of making a quick profit when the market is rising.
The benchmark Shanghai Composite Index has risen more than 15 percent in the past month alone. It hit a 13-month high of 3,266.43 on Tuesday, up 88 percent for the year, before falling back slightly on concern that official efforts to control credit might choke off the flow of money into the market.
"Above 3,000 points, the benchmark index is just in the process of blowing a bigger and bigger bubble," said Wen Lijun, an analyst for Nanjing Securities. "It is just excessive liquidity and no other reason."
Thousands of investors have jumped into the market. The number of new trading accounts soared to a weekly record of 108,932 last week, according to the Securities Depository and Clearing Corp., an arm of China's two stock exchanges.
The corporation did not report a total for the number of individual Chinese investors but said they owned 127.8 million trading accounts as of the end of June — the equivalent of one for every 10 of China's 1.3 billion people.
The government is trying to put the brakes on lending without knocking down stock prices.
China's bank regulator spooked investors last week by issuing a statement reminding institutions not to finance speculation. But after that caused the market to plunge by 5 percent, the central bank issued its own statement promising investors its "relaxed monetary policy" would continue.
The bank said it would use "market tools" — a reference to interest rate hikes to cool borrowing and bond sales to soak up money — to regulate credit, instead of abruptly cutting it off with administrative controls.
Banks have been told to curtail credit for the second half of the year and make sure borrowers put money into productive investments, according to Chinese news reports. They say 10 lenders, including Bank of China Ltd., the country's No. 2 commercial lender, were ordered to buy 100 billion yuan ($14 billion) in government bonds to curb their credit growth.
China is still recovering from its last market bust that saw prices plunge by 70 percent after hitting a peak in October 2007. That wiped out thousands of investors, some of whom had mortgaged their homes to play the market.
"The equity market has been for a big roller coaster ride over the past 18 months and the last thing we need is another rapid run up in prices followed by another collapse," said Williams. "The development of China's financial sector is one of the pressing needs for the economy as it grows."
The central bank is warning that reckless lending also could ignite politically sensitive inflation and leave banks with a hangover of bad debts. Consumer prices fell in June for the fifth straight month, but the central bank says there is a "possibility of a rebound" in inflation in the second half.
Wang Zhijun, a 58-year-old retiree, calls himself a market veteran and says he lost more than 10,000 yuan ($1,400) in the last stock plunge. He said he is more cautious this time but exuded optimism about the market benchmark's continued rise.
"Maybe next year it can go as high as 8,000 points," or more than double the current level, Wang said as he joined the throng in Guosen Securities. A friend standing nearby said that was unlikely, and Wang shot back, "5,000 at least."