Mark Fleischhauer of Jayhawk Capital Management LLC, a U.S. hedge fund investing in Chinese shares, attributes the gains to China's share-overhaul program, which converted nontradable stakes-typically held by government entities-into freely tradable shares, and to high savings rates. "A lot of money was sitting on the sidelines," Mr. Fleischhauer says, prompting Chinese investors to allocate cash to their country's fast-expanding stock market.

Chinese companies also made their mark in the U.S. stock market. The best-performing large-capitalization name in the U.S. last year was China Life Insurance Co., whose American depositary receipts nearly quadrupled on the New York Stock Exchange three years after what was then the biggest initial public offering of stock in the world.

Among other star performers, PetroChina Co., a Beijing oil-and-gas company, rose 72%, adding about $107 billion in market value for a total of $254 billion, according to data provider Birinyi Associates Inc., Westport, Connecticut. The market-value gain was the largest in the world, topping even the gusher of Irving, Texas, oil company Exxon Mobil Corp., which added $97 billion, to reach $447 billion, after its stock rose 36% last year.

China Mobile Ltd., China's largest mobile operator by number of subscribers, which added $77 billion in market cap, was No. 3 among market-cap gainers. Its shares jumped 80%.

A record amount was raised globally by initial public offerings of stock in 2006, propelled by a surge of large deals from China.

As a region, Europe accounted for the largest number and dollar volume of IPOs world-wide. Among nations, China was the heaviest hitter in dollar volume, launching 155 IPOs that raised $53.5 billion, according to Dealogic.

Among the Chinese companies that went public last year was the world's largest IPO ever, Industrial & Commercial Bank of China Ltd., which raised $21.9 billion. Both it and another Chinese offering, Bank of China Ltd., which raised $11.2 billion, chose to list close to home, in Hong Kong and Shanghai.

Foreigners have bought heavily into ICBC as well as into the flurry of other Chinese IPOs that came to market last year.

In Hong Kong, trading volume in Chinese company shares more than doubled. Hong Kong remains a prime venue for Chinese IPOs. In 2006, Chinese companies raised more than $39 billion in that market, and more offerings are coming this year. Meanwhile, Hong Kong's Hang Seng Index rose 34.2% for the year.

China's offerings helped catapult Asia to the No. 2 position world-wide in dollars raised through IPOs in 2006, nudging North America, the previous placeholder, into third place.

"It shows the maturation of the Asian markets to the point where they can absorb larger deals," said Thomas B. Fox Jr., co-head of global equity capital markets at UBS AG. He added that as investment bankers expand their operations in global markets, they are less concerned about where companies list their shares.

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