A significant change in China's monetary policy sparked a stock market boom. Yet 'a lot of instability' remains a threat.

Monday saw a surge in Chinese stocks following the nation's indication of a more aggressive stimulus plan for the upcoming year. According to China state media Xinhua News Agency, Beijing's senior leaders announced they will adopt a "more proactive" fiscal policy and a "moderately loose" monetary policy.Hui Shan, the chief China economist at Goldman Sachs, wrote in a note to clients on Monday, "We view the outcome as an upside surprise due to stronger easing rhetoric, relative to the low market expectations prior to the meeting." The team also anticipates the announcement of "more concrete demand-side stimulus measures" early next year.

Interestingly, the economist notes that China last referred to its monetary policy stance as "moderately loose" in 2009–2010.Following the remarks, Hong Kong's benchmark Hang Seng Index (^HSI), which is dominated by huge Chinese stocks, increased by almost 3% on Monday. The upward movements were echoed by other Chinese-listed corporations and exchanges. On Monday, China's benchmark CSI 300 (000300.SS) increased by more than 1%. Chinese e-commerce behemoths Alibaba (BABA), PDD Holdings (PDD), and JD.com (JD) also saw at least 9% increases in their stock prices. XPeng (XPEV, 9868.HK), a Chinese manufacturer of electric vehicles, too had double-digit growth, increasing by about 14%.