(Photo: CN Fol.com)

Chinese stocks rebounded on Friday from early morning losses to finish higher after China's top officials and financial regulators moved to shore up confidence in the country's economy and stock markets.

At the market's close, the Shanghai Composite Index was up 2.58 percent, at 2,550.47. The smaller Shenzhen Component Index was up 2.79 percent to close at 7,387.74 points. The blue-chip CSI300 index rose by 2.97 percent.

Vice Premier Liu He said on Friday that many factors have caused obvious stock fluctuations and declines in China recently, including interest rate hikes by major economies' central banks and the Sino-US economic and trade frictions. However, Liu said the psychological effect has played a major part.

The future of the Chinese economy is very bright from a long-term perspective, Liu said. Market bubbles have sharply contracted, the quality of listed firms is improving, while valuations are at historic lows, he said.

China's top securities regulator, top banking and insurance regulator and the central bank all issued statements Friday pledging measures to support the market.

Liu Shiyu, chairman of the China Securities Regulatory Commission (CSRC), has pledged to continue reforming the financial market, and promote opening-up and innovation to stabilize and boost market confidence.

Private equity funds are encouraged to buy shares of listed companies and participate in mergers and acquisitions of listed companies, and the CSRC will advance market opening-up on all fronts by supporting foreign asset management firms in setting up institutions in China.

Yi Gang, governor of the People's Bank of China, the central bank, said Friday that China's current stock market valuation has been at a relatively low level historically and is in contrast to the country's stable and positive economic fundamentals. 

Guo Shuqing, chairman of the China Banking and Insurance Regulatory Commission (CBIRC), said the CBIRC is pushing regulations that will allow more insurance money and wealth management products operated by commercial banks to be poured into the markets.

Dong Dengxin, director of the Wuhan University of Science and Technology's Finance and Securities Institute, told the Global Times on Friday that the earlier morning shedding was perhaps caused by Thursday's trading loss on the US markets but the market is also quick to pick up messages by top economic officials in a manner similar to the usual practice in the West.

"The top securities regulator attaches great importance to measures aimed at channeling more funds from wealth management products into the A-share market. Such moves will lay a foundation to add badly-needed, viable long-time investors in the markets," he said.

"The strong performance is a combination of the market's self-correction need and the flooding of positive messages," said Xi Junyang, a finance professor at the Shanghai University of Finance and Economics. 

"It remains to be seen whether the market has hit the bottom," Xi told the Global Times on Friday.