Chinese stocks Friday surged to new highs, with the Shanghai Composite Index climbing above the key benchmark of 4,000 points at closing for the first time since early 2008.

The Shanghai Composite Index finished at 4,034.31 points, up 1.94 percent, or 76.78 points, while the Shenzhen Component Index gained 1.57 percent, or 216.6 points, to close at 14,013.33 points.

Total turnover on the two bourses amounted to 1.27 trillion yuan ($ 206.45 billion), lower than the 1.50 trillion yuan to the previous trading day.

Although the current around 7 percent economic expansion means slower growth for China, it is still a very high growth rate globally, and the improvement in the quality and efficiency of economic growth offers backing for the current strong performance of the stock market, Yu Bin, director of the department of macroeconomic research at the Development Research Center of the State Council, said a press conference on Friday.   

Banks, medical care and pharmaceuticals led the gains.

The banking sub-sector surged over 3 percent. Ping An Bank, a Shenzhen-based private bank established in 1987, was up by the daily limit of 10 percent to close at 19.8 yuan per share. 

The medical care sector climbed by 6 percent, with a string of shares rising by the daily limit of 10 percent. Guangzhou Improve Medical Instruments surged by the daily limit to close at 18.56 yuan per share.

The ChiNext Index, tracking China's Nasdaq-style board of growth enterprises, gained 2.26 percent to close at 2,552.83 points.

"Stocks have risen a bit too fast in recent days, a trend which does not match the current economic performance," Li Daxiao, chief economist at Shenzhen-based Yingda Securities, told the Global Times.

"Risks for some small-cap stocks will emerge. But it is likely stock prices will fluctuate more violently in the short term, which will help dilute the bubbles in the stock market and release risks," Li said.

Xinhua contributed to this story