SHANGHAI - Stocks on the Chinese mainland rose for a third day on speculation the government will accelerate measures to boost the economy, after a report on non-manufacturing industries signaled tight monetary policies are hurting businesses.

Sanan Optoelectronics Co jumped 8 percent after Industrial Securities Co said investors are speculating the light-emitting diode industry will get subsidies.

China Life Insurance Co rose to the highest in three months after Sinolink Securities Co recommended insurers.

The market's gains were limited as developers fell after the Economic Information Daily reported land demand weakened across China because of a cash crunch.

"Some banks may have started to increase lending as part of the government's policy fine-tuning," said Li Jun, a strategist at Central China Securities Co in Shanghai.

"We're likely to see an improvement in liquidity and that'll allow the rebound to continue. It's not to going to be a reversal, as economic and earnings growth is still trending down."

The Shanghai Composite Index climbed 0.2 percent to 2508.09, its highest close since Sept 21. The CSI 300 Index rose 0.1 percent to 2744.30.

The Shanghai Composite has fallen 11 percent this year after the central bank raised interest rates three times and lifted the reserve-requirement ratio to curb inflation that's near a three-year high.

A purchasing managers' index of non-manufacturing industries fell to 57.7 from 59.3 in September, the China Federation of Logistics and Purchasing (CFLP) said on its website on Thursday.

Manufacturing indices released on Nov 1 gave contradictory readings. A gauge from the CFLP and the government fell to the lowest level since February 2009, while a measure released by HSBC Holdings PLC and Markit Economics rose.

"When the economy is cooling, service industries won't be able to escape the impact, especially manufacturing-related services such as logistics and transport," Lu Ting, a Hong Kong-based economist at Bank of America Corp, said before the data. "But government help for smaller businesses and increased consumer spending will support growth in services."

Liu Liang, an analyst at Industrial Securities, said there's "market speculation" that the Chinese government may announce measures to allocate about 8 billion yuan ($1.26 billion) to subsidize purchases of indoor and commercial LED lighting by year-end.

The Shanghai Composite has rebounded 8.2 percent from this year's low on Oct 21, after the government announced measures to help small businesses through easier access to bank loans and said it will lower the threshold for payment on value-added and business taxes for small companies.

Bloomberg News