Chinese stock prices staged a powerful rally of nearly 10% last week after the government shelved an unpopular scheme to sell off shares in state companies. Introduced in July, the plan was aimed at financing a new social welfare fund, while also acting as a mechanism to unwind government involvement in the enterprises. Now it appears that the scheme has been unceremoniously scrapped after the price of domestic ‘A’ shares fell for six days in succession, bringing the index to a 21 month low.

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