CHINA’S securities regulator is investigating possible stock price manipulation amid the recent run-up in the country’s equity market, according to officials with direct knowledge of the matter, a stark reminder of the problems that have long haunted Chinese stocks.

    The probe launched by the China Securities Regulatory Commission comes as stocks traded in China rallied to their highest level in three years yesterday despite China’s weakening economic growth. Much of the surge, analysts and officials say, has been triggered by short-term speculators betting on looser monetary conditions as opposed to investors with long-term belief in China’s economy.

    The securities commission is focusing its investigation on a practice that involves groups of investors pumping up prices of certain targeted stocks. Such practices were common during the early and mid-2000s when China’s stock market boomed along with the country’s breathtaking economic growth. The market peaked in 2007 and started to plummet a year later as the global financial crisis weighed on China’s growth.

    The practice, which is illegal under Chinese law, “is making a comeback,” said one of the officials.

    The securities agency said Friday that it has launched investigations into 18 stocks, but didn’t explain the reasons for the probe at the time. Most of the stocks targeted are those of small-cap firms, such as a maker of automobile tires in Shandong Province and a government-controlled hydroelectric power firm in Hunan Province.

    The probes mainly focus on the “individuals and institutions” who recently bought in the stocks and the companies themselves aren’t the target, according to the officials.

    Chinese stocks have been on a tear in recent months, making China one of the world’s best-performing markets. As of yesterday, the benchmark Shanghai Composite Index was up nearly 48 percent year-to-date amid a surge in trading volumes. The index is at its highest level in three years. (SD-Agencies)