BEIJING (REUTERS) - A document purporting to detail reform plans by China's ruling Communist Party, including liberalising the prices of resources and reining in some state monopolies, circulated widely on social media on Friday, helping fuel the biggest stock market rally in two months.
The document appeared to be a scanned copy of part of a version of a policy statement with annotations on it. It circulated on the Twitter-like social media service Weibo and was passed around widely on the social messaging service WeChat.
Reuters was not able to independently verify the authenticity of the document, but market players said that its relatively detailed language on reforms helped fuel a rally in Shanghai and Shenzhen stocks that saw the CSI300 index post a 2 per cent rise amid heavy volume.
The Communist Party is widely expected to release a more detailed blueprint for economic reforms early next week, following a more general communique issued on Tuesday at the close of a plenary session of its elite Central Committee.
The relatively vague wording of the communique had disappointed the market, contributing to a fall of more than 2 per cent in the CSI300 index on Wednesday.
"The move up today in the A-share market was mainly driven by the leaked draft document that gave people the reform details that were lacking in the initial communique," said a strategist with a Chinese brokerage, who asked not to be identified because he was not authorised to speak to media.
Another equity trader at a mid-sized brokerage in Shanghai said: "Compared to the communique released a few days ago, several factors exceeded expectations. So the market reacted." Calls to the publicity department of the Communist Party were not answered, and there was no immediate response to a faxed request for comment.
The document said the government will push reforms on the pricing of water, oil, natural gas, electricity, telecommunications and transportation, and refrain from intervening in the market. The government will also push ahead with exchange rate and interest rate reforms, establish a market-driven bond market and open capital markets further, while speeding up moves towards full capital account convertibility, it said.
There will also be reforms to limit various forms of state monopolies. State-owned firms must adapt to market changes, improve their efficiency and engage in fair competition, and exercise more social responsibility, it said.