The Shanghai Composite index jumped 0.9% to 3,007.35. Heavyweight property shares led a late rally after state media reported the government was ending limits on residency for smaller cities to help encourage urbanization.
Although many millions of Chinese have left their rural villages in past decades to find work in other regions and in the cities, many face limits on access to social protections and education due to a system of household registration that restricts such benefits to long-time city dwellers.
Chinese shares also were buoyed by news of plans for more government spending on railways and other infrastructure.
Elsewhere in Asia, Japan's Nikkei 225 index advanced 0.6% to 23,924.92, while the Kospi in South Korea gained 0.4% to 2,197.93. India's Sensex lost 0.3% to 41,339.87. In Southeast Asia, benchmarks were mixed, while Taiwan was flat.
Markets were closed in Europe, Hong Kong, Malaysia and Australia.
U.S. futures were higher, with the contracts for the S&P 500 and the Dow Jones Industrial Average up 0.1%.
World markets have rallied since President Donald Trump said earlier this week that a trade deal with China was ready for signing. Chinese officials have confirmed that the two sides are in close contact on their so-called Phase 1 agreement to help ease friction over Beijing's technology ambitions and other trade issues.
"Despite recession worries, trade tiffs, and rancorous politics, investors managed to have their Christmas cake and eat it this year," Stephen Innes of AxiTrader said in a commentary.
Wall Street ended nearly flat Tuesday in a shortened trading session before closing for Christmas Day. U.S. markets reopen Thursday.
The benchmark S&P 500 index slipped less than 0.1% to 3,223.38. The Dow Jones Industrial Average dropped 0.1%, to 28,515.45. The Nasdaq composite gained 0.1% to 8,952.88.
"With the heavyweight colossal tech sector giants leading the way, investors are showing no fear as the market remains underpinned by the thawing in the US-China trade squabble and easy central bank policy," Innes said.
Earlier this week, China announced it was slashing tariffs on 850 types of products as part of its efforts to improve the quality of its trade and meet demand for scarce items such as pork, which is in short supply due to outbreaks of African swine fever that have devastated its hog industry.
But so far details of the China-U.S. agreement have not been disclosed, leaving in question the scope of the deal and its ability to resolve deep, longstanding conflicts over Chinese industrial policy and trade practices.
In energy trading, benchmark U.S. crude gained 19 cents to $61.30 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude oil, the international standard, picked up 13 cents to $66.29 per barrel.
The U.S. dollar was trading at 109.56 Japanese yen, up from 109.35 yen on Wednesday. The euro was at $1.1093, weakening from $1.1220.