i am flying from hong kong--> shanghai-->bangkok, can i use this 72 hours free transit policy?

For Direct Transit
No visa is required for foreigners who hold tickets to the final destination and have booked seats on international airlines, ships, trains transiting directly through China, and will stay for less than 24 hours and do not leave the specified transit area.

So if you're just changing plane at Shanghai and Beijing within 24 hrs; you don't need one to be at Beijing and Shanghai. Hong Kong have different policies.

I want to stay for 72 hours. Will this work?

Yes, the 72-hour free transit policy works for you on both ways.