CORRECTED-UPDATE 3-China's efforts to calm investor jitters help markets rebound

(Corrects pronoun for Wang to 'she', not 'he', in third-last paragraph)

HONG KONG/BEIJING, July 29 (Reuters) - China stepped up attempts to calm frayed investor nerves after a wild markets rout this week by telling foreign brokerages not to "overinterpret" its latest regulatory actions, setting the stage for a rebound in beaten-down stocks on Thursday.

Chinese state media also joined in to say yuan-denominated assets in China remained attractive and that short-term market panic did not represent long-term value.

China stocks had their best day in two months on Thursday. The blue-chip CSI300 Index jumped 1.9% and the Shanghai Composite Index gained 1.5%, but for the week, the gauges are still down 4.7% and 3.9%, respectively.

Shenzhen's start-up board ChiNext jumped 5.3%, recouping nearly all of this week's savage losses.

Hong Kong's Hang Seng Index ended Thursday up 3.3%, shrinking this week's loss to 3.7%. The Hang Seng Tech Index , the target of a heavy sell-off earlier this week, surged 8%, but is still down 4.3% for the week.

The gains came after the securities regulator on Wednesday night held a meeting with executives of top global investment banks with an aim to calm financial markets nerves, people familiar with the matter told Reuters.

The meeting added to official efforts to shore up investor confidence, which has been dented by Beijing's sweeping regulatory actions that hit firms in the $120 billion private tutoring sector and technology behemoths.

"This is more to calm the market to isolate the education industry and not to overinterpret it," said one of the people, who has knowledge of the meeting held by China Securities Regulatory Commission (CSRC) vice chairman Fang Xinghai.

At the meeting, Fang told the bankers that official policies would be rolled out more steadily to avoid sharp volatility in the markets, said another person, adding Fang also indicated the crackdown was not aimed at decoupling Sino-U.S. financial markets.

Executives from investment banks Credit Suisse, Goldman Sachs, JPMorgan and UBS, among others, attended the meeting, said the people, who declined to be named as they were not authorised to speak to the media.

The regulator only invited those foreign brokerages with existing licenses to operate in the country, said a separate person with knowledge of the meeting.

CSRC did not immediately respond to Reuters' request for comment. Representatives at Credit Suisse, Goldman, JPMorgan, and UBS declined to comment. Bloomberg first reported the regulatory meeting on Wednesday.

"Recent events definitely have a negative impact on the global investor sentiment about China. So the risk is whether the long-term money will also pull out of China," said Wang Qi, CEO at fund manager MegaTrust Investment (HK).

"In terms of the foreign capital flows, whatever happened lately was mostly driven by hedge fund type hot money ... we welcome any Chinese government's moves to increase transparency and rebuild investor confidence."

'REGULATORY RISKS'

The CSRC meeting followed a brutal sell-off in shares of Chinese companies this week after investors were spooked by Beijing's rules that ban for-profit tutoring in core school subjects.

The new rules for the private education companies closely followed China's antimonopoly campaign against technology giants and new regulations for home-grown companies looking to list overseas.

Qian Wang, Vanguard Group's Asia-Pacific chief economist, said that it's natural for global investors to be exposed to higher regulatory risks when it comes to investing in China.

"Although China is the world's second-biggest economy, it remains an emerging market with economic, policy and regulatory uncertainty," Wang said. If investors seek higher return, "you need to bear higher risks, which is natural", she said.

Beijing stepped up efforts to soothe investor nerves over the last couple of days amid concerns that a sharp sell-off in equities could have a spillover effect to other asset classes, including bonds and foreign exchange.

The state-backed China Daily said Beijing remained supportive of domestic companies seeking to list overseas and that regulators would soon unveil more measures to further open capital market to foreign entities. (Reporting by Binbin Huang, Cheng Leng, Samuel Shen, Scott Murdoch; Writing by Sumeet Chatterjee; Editing by Sam Holmes and Ana Nicolaci da Costa)