After an annual policy-setting conference presided over by new Communist Party Chief Xi Jinping on Sunday, the official Xinhua news agency reported that China will maintain steady economic polices in 2013, leaving room for manoeuvre in the face of global risks while deepening reforms to support long-term growth.

That helped boost sentiment, to extend last week's rally, and the CSI300 of top Shanghai and Shenzhen listings went into thelunch break 0.7 percent up and is now trading in positive territory on the year. The Shanghai Composite rose 0.5 percent.

In Hong Kong, the Hang Seng index eased slightly from Friday's 16-month high, dragged lower by oil producers and heavyweight HSBC Holdings, ending the morning session down 0.4 percent at 22,521.8. The China Enterprises index closed flat.

Steps by Chinese authorities to boost confidence in domestic markets along with hopes that China's new leaders will succeed in stabilizing growth and push through reforms have triggered a rebound off of multi-year lows hit earlier this month.

The CSI300, comprising China's large-cap stocks, is up 12.9 percent since its Dec. 4 low.

"Overall, the resolution of the leadership contest is positive for the Chinese market," said Martha Wang, portfolio manager of Fidelity's China Focus Fund, in an emailed statement.

"There are many companies with strong fundamentals, which have been indiscriminately punished by political uncertainty, trading at attractive valuations," said Wang.

Coal producers led a rebound in the materials sector on mainland markets with China Shenhua up 1.9 percent. Yangquan Coal rose 8.2 percent.

Premium liquor producers, hit in recent weeks by concerns over contamination, rebounded with Wuliangye up 4.4 percent and Kweichow Moutai up 2 percent.

Center>Copyright Reuters, 2012