China stocks end 2017 with strong gains

China stocks ended higher on Friday, capping a strong year of gains as domestic and global investors increased their exposure to China mainland markets despite worries about a slowing economy and further regulatory crackdowns.

At the close, the Shanghai Composite index was up 0.35 percent at 3,307.97. The bluechip CSI300 index was up 0.31 percent. The smaller Shenzhen index ended up 0.64 percent.

For 2017, the Shanghai stock index was up 6.21 percent, the CSI300 up 21.8 percent, while China’s H-share index listed in Hong Kong was up 24 percent.

On Friday, China’s securities regulator said it would launch a pilot scheme that allows China mainland-incorporated companies listed in Hong Kong to convert their non-tradable equity into free-floating shares.

Although the scheme would potentially increase share supply in the market and hurt valuations, analysts say that allowing founders or major shareholders to float their shares could help improve corporate governance.

Participants in the program can choose the proportion of shares they would like to float, the China Securities Regulatory Commission said.

From the global perspective, major indexes from Japan to the US and emerging markets were up double-digit percentages for the year, with the pan-European FTSEurofirst 300 index up 7 percent.