SHANGHAI, Aug 31 Reuters Investors are snapping up China39;s coal stocks, betting the country39;s urgency to revive economic growth will override concerns about pollution to drive demand for fossil fuels and reliable energy.

China39;s coal index surged roughly 10 in August, bringing this year39;s gains to nearly 50, against a drop of almost 20 for the bluechip CSI300.

Flows are likewise impressive with the biggest listed fund tracking the sector, Guotai CSI Coal Consumable Fuels Index ETF, reporting that its assets under management grew fivefold from a year earlier to reach 5 billion yuan 720 million at endJune.

Beijing must weigh shortterm economic stabilityagainst longerterm goals of carbon emissions reduction, with markets betting that a focus on the former will prevail. The coal stock gains are also tracking the global outperformance of oil, gas and mining stocks.

Demand for coal will remain big in China. The supply of renewable energy is not stable, said Yuan Yuwei, hedge fund manager at Water Wisdom Asset Management.

A reckless, Great Leap Forward campaign to slash carbon emission would only create more peril than pollution, Yuan added, as it threatens to choke the economy and industrial output.

Poor weather has disrupted renewable energy production in China and global energy security concerns have increased after Russian gas supply cuts exposed just how dependent Europe is on energy imports.

A long drought across the Yangtze basin this year has triggered…