China stocks end higher as Beijing forms new economic team

SHANGHAI: China stocks ended higher on Monday, with gains led by healthcare firms, after Beijing formed a new economic team.  At the close, the Shanghai Composite index was up 0.3 percent at 3,279.25, while the blue-chip CSI300 index gained 0.4 percent to 4,074.25.

The smaller Shenzhen index ended up 0.27 percent and the start-up board ChiNext Composite index was higher by 1.19 percent.

Property firms led the decline, with a property sub-index losing 2.5 percent after data showed China's new home price growth slowed in February.

China elevated a key confidante of President Xi Jinping to one of the top positions in government on Monday as Beijing cracks down on riskier financing and a debt build-up that may pose systemic risks to the world's second-largest economy.

The endorsement of Liu He as a vice premier also comes as the United States presses China to cut its trade surplus by $100 billion. Harvard-educated Liu, 66, was the most prominent envoy to visit Washington recently to prevent the outbreak of a trade war.

While most of the personnel changes on the government's economic team were widely anticipated, the choice of Yi Gang as the new head of the People's Bank of China (PBOC) was unexpected.

Yi's nomination is "a bit unexpected as he holds a relatively low political ranking as the alternative member of CPC Central Committee," said Tommy Xie, China economist at OCBC Bank in Singapore. The committee is the largest of the party's elite decision-making bodies.

"In terms of implication, we see policy continuation as Yi will support Liu He to drive economic reform. Both are the main driver to China's reform in the past few years," Xie said.

The largest percentage gainers in the main Shanghai Composite index were Shenzhen Geoway Co Ltd up 10.06 percent, Zhe Jiang Dong Ri Ltd Co, up 10.04 percent and SDIC Zhonglu Fruit Juice Co Ltd, up 10.03 percent.

The largest percentage losers in the Shanghai index were Cultural Investment Holdings Co Ltd, down 9.99 percent, Shanghai Fukong Interactive Entertainment Co Ltd, down 9.98 percent and China Hainan Rubber Industry Group Co Ltd, down 7.35 percent.