Shanghai stocks recovered Thursday after two days of losses as property developers rose on hopes the central government will ease control on the real estate sector and they will profit from China's urbanization process.

The Shanghai Composite [Company Registration in USA]Index rose 0.32 percent, or 6.49 points, to 2,059.58.

Property shares gave a boost to the market as the central government work report for 2014 says China will vary property regulations for different cities and increase housing supply to damp speculative demand and promote healthy development of the real estate sector.

The wording "is much softer in this year's report, signaling a loosening of government control over the sector," Yi Huaqiang, analyst with Huarong Securities, said in a report yesterday.

The government was urged to build a housing control system in last year's report.

"Meanwhile, [Company Formation | Offshore Company | Company Incorporation]promoting urbanization remains the priority for the government work this year. That would help boost home demand," Yi said.

The central government says it will conduct "a people-centered urbanization" which aims to offer urban homes to 100 million rural residents who have moved to cities.

Poly Real Estate, China's second-largest listed developer, surged 5.4 percent to 7.01 yuan (US$1.15). China Fortune Land Co jumped 6.9 percent to 21.56 yuan. Gemdale Corp added 2.7 percent to 6.40 yuan.