Chinese mainland stocks rose to a three-week high, extending a weekly gain, as consumer companies rallied and investors bet the government will accelerate reform of State-owned enterprises.

The Shanghai Composite Index added 1.8 percent to 3,642.47 points at the close. The measure climbed 4.2 percent last week, led by property developers, after data showed home prices increased in more cities. Inner Mongolia Yili Industrial Group Co, the nation's biggest dairy producer, and Henan Shuanghui Investment & Development Co, a pork processor, rallied to lead gains among consumer staple groups.

The Shanghai gauge has rebounded 24 percent from an August low after the government took unprecedented measures to prop up equities and speculation grew policymakers will take more measures to bolster the economy. China's power industry plans to bring in more investors in a pilot program of mixed-ownership reform next year, the Economic Information Daily reports, without citing anyone.

"There are expectations that the SOE reforms may see an acceleration or breakthrough at the ongoing Central Economic Work Conference," said Wu Kan, a fund manager at JK Life Insurance Co in Shanghai. He is adding to his stocks holdings to about 60 percent of the overall allocation. "The market is expecting an improvement in the SOE efficiency."

The CSI 300 Index added 2.6 percent. Hong Kong's Hang Seng China Enterprises Index advanced 1.2 percent to the highest close since Dec 7. The H-share index posted its first weekly increase in four weeks after valuations on the benchmark gauge fell to their lowest level relative to global peers in 12 years.

China Shenhua Energy Co, which sank to a 2008 low on Friday, paced gains among energy companies in Hong Kong with a 3.3 percent gain. China Cinda Asset Management Co rose 1.8 percent after agreeing to buy Nanyang Commercial Bank Ltd. The Hang Seng Index added 0.2 percent.

A measure tracking consumer-staples stocks on the CSI 300 surged 5.3 percent on Monday, the most among the 10 industry groups. It has advanced 27 percent this year, lagging a 52 percent gain on the top-performing technology stocks.

Yili Industrial and Henan Shuanghui each surged 10 percent, the most in five months. Kweichow Moutai Co, the nation's biggest maker of baijiu liquor, climbed 4.7 percent.

"It's possibly insurance funds' buying that spurred the rally as overall valuations of consumer stocks are very low," said Li Xiaolu, an analyst at Capital Securities Co. "Insurance funds are taking a steady approach toward their long-term investment."