BEIJING -- After watching Chinese stock prices gallop upward for months, Ding Xiurui wanted a piece of the action.

The 45-year-old office worker stood in line at a bustling brokerage last week to open her first trading account. She brought her sister, who opened an account too. They joined millions of other novice investors who are jumping into a market that has soared to dizzying heights, with prices up more than 51 percent this year.

"We still can make money," Ding said as she stood at the counter at Tiantong Securities with the paperwork for her new account. Asked what stocks she would buy, Ding said: "I don't know. I'm still learning."

China is in the grip of stock market fever. Shares are changing hands in record numbers as first-timers pour in new money. Some are mortgaging their homes or dipping into retirement savings to finance a frenzy of trading known as chao gu, or "stir-frying stocks."

This year's 50 percent surge in the main market measure, the Shanghai composite index, comes on top of a 130 percent increase in 2006. The market shrugged off a one-day drop of nearly 9 percent in late February that set off a decline in stocks around the world.

Last week, the Shanghai index passed the 4,000-point mark for the first time, and economists say it could break 5,000 in a month. It closed Monday at 4046.39.

Economists say the government should take steps to moderate the price surge or risk a sharp fall that could hurt small investors.

"This is a very critical time. If policy adjustments take place now, the market can still have a sustainable development," said Hong Liang, a Goldman Sachs economist. "The longer they wait, the harder the eventual landing will be."

Enthusiasm for stocks is fueled in part by a lack of other investments in a heavily regulated economy. Famously frugal Chinese families save up to 40 percent of their incomes, but bank accounts pay just 3 percent interest, less than the rate of inflation.

Some have made fortunes in the booming real estate market, but the government is cracking down on speculating to rein in soaring housing costs. Interest on bonds is low, and currency controls prevent most families from investing abroad.

"We are opening 40 to 50 new accounts a day," said Zhang Jun, deputy manager of the Tiantong Securities branch. "Six months ago, it was four to five a day."

Nationwide, the number of trading accounts has soared 30 percent over the past year, to 95 million, one-sixth of them opened in the past four months, according to the China Securities Depository and Clearing Corp., which is owned by China's two stock exchanges.

Stock prices are 30 to 40 times earnings, an unusually high ratio for many major markets, which some say makes them unrealistic.

"But that is not paying attention to earnings growth, which is very, very strong," said Goldman Sachs' Hong Liang.

And many investors believe Chinese leaders will prop up prices to avoid turmoil ahead of a key Communist Party meeting in late 2007 and the Beijing Olympics in 2008.

"We hear that before 2008 the government won't let prices fall," said Ding's sister, Ding Jingxian. "We're not afraid."