* HSI +0.2 pct, H-shares +0.5 pct, CSI300 +1.1 pct
* China indexes lifted by property, banking stocks
* Li & Fung up 16.7 percent on good earnings (Updates to midday)
By Alice Woodhouse and Chen Yixin
HONG KONG/SHANGHAI, March 21 (Reuters) - Hong Kong shares edged higher on Friday, helped by strong gains from Li & Fung after solid earnings, but investors remained bearish on the Chinese economy.
China indexes had bigger gains than Hong Kong's, boosted by large-cap financial and property plays, though traders see little potential for further rises given worries about credit defaults.
By midday, the Hang Seng Index was up 0.2 percent at 21,217.52 points. It was on track for a third straight weekly loss, being down 1.5 percent this week.
The China Enterprises Index of the top Chinese listings in Hong Kong rose 0.5 percent, leaving it down 0.5 percent for the week.
While that index tracking mainland enterprises has dropped almost 20 percent since the start of December, investors on Friday bought selected stocks based on their earnings.
The CSI300 of the largest Shanghai and Shenzhen A-share listings rose 1.1 percent, and the Shanghai Composite Index was up 0.8 percent at 2,009.29 points.
On the week, the CSI300 has fallen 0.6 percent and while the Shanghai composite index rose 0.2 percent.
"Sentiment remains bearish, they are still speculating on small names or individual names but as a whole they are not willing to push the market higher," said Alex Wong, director of asset management at Ample Finance Group.
"People do not want to take substantial risk in this kind of uncertainty, so that's why we will see Chinese shares continue to underperform the world, " Wong said.
On Friday, shares in Hong Kong-listed global sourcing firm Li & Fung soared 16.9 percent as investors cheered better-than-expected earnings and focused on a plan that includes the spin-off of its unit that manages brands and licences.
Shares in China's GOME Electrical Appliances jumped 8.3 percent after the company reported better-than-expected 2013 profit.
China Mobile, the world's largest carrier by subscribers, fell for a second day, dropping 4.4 percent after its 2013 profit missed analyst expectations.
On mainland markets, the largest developer China Vanke gained 3.2 percent after its biggest shareholder China Resources raised its stake in the company to 15 percent.
Banking shares also supported Friday's rise. Shanghai Pudong Development Bank Co jumped 5.2 percent and Industrial Bank Co. rose 2.7 percent. (Editing by Richard Borsuk)