* HSI -0.1 pct, H-shares -0.4 pct, CSI300 +0.2 pct
* Yili rises on reports saying executives bought more shares
* China Resources Land extends gains after Barclays upgrade
* Hong Yuan Securities has surged over 40 pct this week (Updates to midday)
By Grace Li
HONG KONG, July 31 (Reuters) - Hong Kong and China shares, on track for their best month since 2012, had choppy trading in reduced volumes on Thursday as investors remained cautious ahead of release of China's July manufacturing activity survey.
On Friday, the official PMI number for July will come out.
Activity in China's vast factory sector likely expanded at the fastest pace in eight months in July, a Reuters poll showed on Wednesday.
The Hang Seng Index, which has risen the past seven sessions, was off 0.1 percent to 24,701.28 points at midday. The China Enterprises Index of the top Chinese listings in Hong Kong fell 0.4 percent.
Those indexes will have their third straight monthly gain, now up 6.5 percent and 7.1 percent, respectively. July is set to be the best month for the Hang Seng since September 2012 and for the H-share index since November 2013.
The CSI300 of the leading Shanghai and Shenzhen A-share listings rose 0.2 percent, while the Shanghai Composite Index ended the morning flat at 2,181.11 points.
They have jumped 7.4 percent and 6.5 percent on the month, respectively, and appeared on track for their best monthly gains since December 2012. The July gains have let the two mainland indexes move into positive territory for 2014.
Linus Yip, strategist at First Shanghai Securities, said the recent rally in Hong Kong was "a significant breakthrough".
"I think it's sustainable but in the short term, it may have a consolidation," he said. "After consolidation, if the fund flow is still there, the market may continue the good run."
Inner Mongolia Yili Industrial Group was the top index boost in onshore markets. It rose 4.6 percent to a 3-1/2-month high after media reports said its chairman and three other executives bought more than 40 million shares in the secondary market on Tuesday and Wednesday.
Hong Kong-listed Chinese developers led gains on the Hang Seng. China Overseas Land & Investment spiked 3.7 percent. China Resources Land climbed 2.6 percent to its highest since April 9 after Barclays upgraded the developer to "overweight" from "equalweight".
In a research note on Thursday, Barclays said they "believe the sector rally has further to go," but "expect only the quality developers to continue to outperform, as they gain market share."
Hong Yuan Securities soared another 7.9 percent in Shenzhen, taking its gain for this week - when it resumed trading after more than eight months - to 42 percent.
The firm's shares were buoyed by a deal with Shenyin & Wanguo Securities, which is to buy Hong Yuan to create China's third-biggest brokerage. (Editing by Richard Borsuk)