BEIJING: Shanghai stocks surged more than four percent on Wednesday as details of China’s next five-year plan raised hopes for reforms even as growth slows in the world’s second largest economy, dealers said.
China’s ruling Communist party late Tuesday issued guidelines for its 2016-2020 development plan, including calling for liberalisation in its capital markets, following a high-level meeting last week.
Investors shrugged off signals of lower economic growth from Chinese President Xi Jinping, who said that annual expansion of only 6.5pc would be enough.
China logged its worst economic performance since the global financial crisis in the third quarter, with gross domestic product rising just 6.9pc – its lowest level in six years.
The benchmark Shanghai Composite Index jumped 4.31 percent, or 142.94 points, to close at 3,459.64 on Wednesday.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, soared 5.12pc, or 101.82 points, to 2,089.29.
Shares were also lifted by an article by China’s central bank chief, also released Tuesday, which said the country aims to link trading between the Shenzhen stock exchange and the Hong Kong market this year.
But the People’s Bank of China later updated the posting, clarifying that the article was based on an internal speech that Mr Zhou delivered in May, while the Hong Kong exchange said no agreement had been entered into.
“The details of the next five-year plan had a major positive impact on the market,” Zhang Yanbing, an analyst at Zheshang Securities, told AFP.
“Investor confidence has recovered, so any slightly positive news can become a big boost to the market,” he said.
An announcement that the presidents of China and Taiwan will meet this weekend in Singapore, the first such talks between the rivals since they split at the end of a civil war in 1949, also helped mainland stocks with links to the island.
As part of the government’s wide-ranging reforms, China recently announced the end of its decades-long one child policy. The news was a boost for companies that make nappies, prams and infant formula, but shares in condom manufacturers slumped.
