SHANGHAI (Reuters) -China stocks closed at an eight-month high on Tuesday, while Hong Kong shares extended gains to a multi-year peak, driven by construction and power firms after work began on a major dam project in Tibet, billed as the world's largest.

China has started construction of the world’s biggest hydroelectric dam, a project that’s set to be far larger than the Three Gorges Dam — already the world’s biggest single source of green power — and more expensive than the International Space Station.

The project, part of China’s push to expand renewable energy and reduce carbon emissions, could affect millions downstream in India and Bangladesh.