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Beijing’s reforms raise hopes for rally

Could this be the week China shares finally escaped a prolonged bear market?

Having fallen 65 per cent since its bubble-era peak in 2007, the Shanghai Composite bounced 5 per cent this week after the Chinese premier and the head of its securities regulator sought to boost confidence in equities and pledged to enact a fresh round of reforms.

“The pace of financial reform is picking up noticeably,” says Joyce Poon, analyst at research house Gavekal. “The result could be a substantial and permanent re-rating of Chinese stocks over the next six months.”

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