The Chinese state-owned oil and gas producer PetroChina has became the world's biggest company after it almost tripled on its first day of trading in Shanghai, becoming the world's first trillion-dollar (£480bn) firm and knocking the US oil giant Exxon Mobil off the top spot.

PetroChina is almost twice the size of Exxon Mobil by market capitalisation and its dizzying debut marks another milestone in a remarkable year for stock market culture in China. A near tripling in the value of the stock market this year means China now has more of the world's 10 largest companies by market value than the US, while China has hosted more share flotations and raised more capital than anywhere else in the world this year.

Plenty of market liquidity and a strong earnings outlook for PetroChina meant strong interest from institutional investors. PetroChina came to market at 16.70 yuan (£1.08) and ended the day on 43.96 yuan, valuing the company at £480bn, compared with Exxon Mobil's £234bn market value on Friday.

Investors on the benchmark Shanghai Composite Index shifted away from other big companies, and large-capitalised shares on the index ended sharply lower.

With inflation rising and growth continuing at heady double-digit rates, speculators in the world's most populous nation are putting some of their £770bn savings into the share market.

The rally on China's stock exchange has led to further fears of a bubble emerging and securities regulators are saying the market holds "great risks".

So far this year China's central bank, the People's Bank of China, has urged banks to set aside more reserves eight times, and has raised interest rates five times to help cool the economy. In frantic trading last week, insurer China Life surpassed AT&T Inc. in market value, which means five of the 10 biggest firms by market cap are now Chinese, compared with three in America.

(By Clifford Coonan, The Independent, 06/11/2007)