* SSEC +0.3 pct, CSI300 +0.4 pct, HSI +0.3 pct
* China banks surge on hopes deregulation will increase valuation
* China treasury yields at the highest in three years
SHANGHAI, Nov 13 (Reuters) - China stocks rose on Monday morning, led by banks, as excitement over financial deregulation unveiled last week continued to boost sentiment, mitigating wider concerns about higher corporate borrowing costs amid rising bond yields.
The blue-chip CSI300 index rose 0.4 percent, to 4,128.82 points at the end of the morning session, while the Shanghai Composite Index gained 0.3 percent, to 3,442.99 points.
Investors piled into financial stocks, betting Beijing's move to widen foreign access to its giant financial sector would attract fresh foreign capital inflows, and push up the valuations of Chinese lenders, insurers and brokerages.
The latest changes, announced by vice finance minister Zhu Guangyao on Friday, include raising the limit on foreign ownership in joint-venture firms involved in the futures, securities and funds markets to 51 percent from the current 49 percent. Meanwhile, China will drop the foreign ownership cap on banks.
"The relaxation of existing curbs will ease restrictions on investment inflows to China," wrote Raymond Yeung, ANZ's chief economist of Greater China.
"Given the fast expansion in financial assets over the past few years, we believe that there will be a slew of optimistic headlines carrying positive emphasis on their value."
Banking shares jumped, with an index tracking the sector rising 1.7 percent. Small- and mid-sized commercial banks, including Jiangsu Wujiang Rural Commercial Bank , Ping An Bank Co Ltd and Wuxi Rural Commercial Bank Co were among the biggest gainers.
The strength in banking stocks counteracted wider fears stirred by rising bond yields with China's benchmark 10-year treasury yield <CN10YT-RR> up at it the highest level in three years.
Hong Kong stocks were more subdued, reflecting cautious trade in Asia as investors look to see whether U.S. Republicans can hammer a tax reform deal quickly.
The Hang Seng index added 0.3 percent, to 29,198.26 points, while the Hong Kong China Enterprises Index lost 0.3 percent, to 11,711.45.
The top gainers among H-shares were China Minsheng Banking Corp Ltd up 2.41 percent, followed by Zhuzhou CRRC Times Electric Co Ltd gaining 2.13 percent and China Shenhua Energy Co Ltd up by 1.95 percent.
The three biggest H-shares percentage decliners were Great Wall Motor Co Ltd, which fell 2.81 percent, Sinopharm Group Co Ltd, down 1.8 percent and China Life Insurance Co Ltd, which declined 1.8 percent.
(Reporting by Samuel Shen and John Ruwitch; Editing by Sam Holmes)