* CSI300 +3.1 pct; SSEC +2.7 pct; HSI +0.4 pct
* Economic reforms need a vibrant market - analyst
* Jiangsu bond issue eases fears over local govt debt
By Samuel Shen and Pete Sweeney
SHANGHAI, May 19 (Reuters) - China stocks bounced sharply off one-week lows on Tuesday, cheered by Beijing's 2015 guidelines for economic reform that prioritize further opening of the country's capital market and the restructuring of state enterprises.
The guidelines, which target areas including the Shenzhen-Hong Kong stock connect, the initial public offering (IPO) system and yuan globalisation, revived investor interest in blue-chip stocks, said Tian Weidong, analyst at Kaiyuan Securities in Xian.
"You need a vibrant stock market to push forward economic reforms, whether it's about asset securitisation or industry consolidation," he said. "With such a policy backdrop, investors are emboldened to stay in the market."
The CSI300 index rose 3.1 percent, to 4,718.97 points at the end of the morning session, while the Shanghai Composite Index gained 2.7 percent, to 4,400.20 points.
Hong Kong shares tracked mainland markets higher. The Hang Seng index added 0.4 percent, to 27,706.87 points, while the Hong Kong China Enterprises Index gained 1.9 percent, to 14,187.09.
But Shenzhen's ChiNext, the Nasdaq-style start-up board, dipped 0.2 percent, easing from intraday record highs on profit-taking.
Investor excitement switched back toward blue chips, with banking and infrastructure stocks rising sharply.
Investors were also encouraged by news that Jiangsu has successfully auctioned 52.2 billion yuan ($8.41 billion) of municipal bonds, becoming the first Chinese province to issue such instruments as part of China's debt-to-municipal bond scheme.
"Previously, there was a lot of concern over the local government debt issue, and banks' asset quality. Now, that worry is greatly eased," Kaiyuan Securities' Tian said.
He added that while banks' margins could suffer from holding low-yielding municipal bonds, their risk of default is becoming much lower too. Also, banks are now allowed to use the bonds as collateral to borrow from the central bank, which Tan called "great news".
Brokerage shares also surged on Tuesday, benefiting from high volumes during volatility, as well as the spotlight the sector shared with Huatai Securities Co's Hong Kong IPO.
Huatai, China's largest brokerage by trading volume, on Monday launched an IPO to raise up to $5.2 billion. It secured the chairman of Tencent Holdings as a cornerstone investor.
$1 = 6.2039 Chinese yuan Editing by Richard Borsuk