* Shanghai shares add 0.7%, blue-chips up 0.5%
* Global policymakers to discuss potential support measures
* Almost 300 million back to work in China since long holiday
SHANGHAI/HONG KONG, March 3 (Reuters) - China shares closed higher on Tuesday as new coronavirus cases in the country fell, while hopes of global policy action to limit the economic hit from the epidemic also aided sentiment.
** The Shanghai Composite index closed up 0.7% at 2,992.90, while the blue-chip CSI300 index ended 0.5% higher. Both indexes jumped more than 3% on Monday.
** Mainland China reported 125 new cases of coronavirus infections as of Monday, down from 202 cases a day earlier. However, cases outside China continued to rise, posing a greater risk to the global economy.
** The heads of ECB and Bank of Japan issued emergency statements on Monday that echoed one from Fed Chair Jerome Powell late last week, with all three looking set to take steps to limit economic damage from the virus.
** Loosening global liquidity conditions could have a spillover effect in China, while Beijing’s policies to cushion the virus hit could also stay at a high level as the resumption of production in the country remains partial, Bohai Securities said in note.
** Data on Monday showed China’s factory activity contracted at its sharpest pace on record in February, though it is expected to improve somewhat in March as more companies slowly resume production. Nomura estimates only 44% of the hardest hit firms have resumed business as of March 1. ** Nearly 300 million people have resumed work in China since the Lunar New Year break as more firms restart business and travel restrictions ease, although many small firms are still struggling to find enough workers to run plants. ** In China, policymakers have already implemented a raft of measures to support the economy as the epidemic is expected to have a devastating impact on first-quarter growth. ** G7 finance ministers and central bank governors will hold a conference call on Tuesday to discuss measures to deal with the outbreak that is rapidly spreading outside China, a U.S. Treasury spokeswoman said on Monday. ** Around the region, MSCI’s Asia ex-Japan stock index was firmer by 0.8%, while Japan’s Nikkei index closed down 1.2%. ** At 0700 GMT, the yuan was quoted at 6.9806 per U.S. dollar, 0.3% weaker than the previous close of 6.962. ** As of 0701 GMT, China’s A-shares were trading at a premium of 28.0% over the Hong Kong-listed H-shares. (Reporting by Luoyan Liu and Noah Sin; editing by Uttaresh.V)