Unimpressed by the promotion of markets to a "decisive" role in China's reform agenda for the next decade, investors sold off Chinese shares on Wednesday, disappointed by a lack of details in the reform plan and apparent reluctance to overhaul the state-owned sector.
U.S. Treasury Secretary Jack Lew also bemoaned the lack of details and said he hoped to gather more information about specific policies in discussions with China.
"Frankly, there are a lot of questions still to be answered," he said on CNBC during a visit to Singapore. "The communique coming out of the plenum was at a very general level."
The ruling Communist Party said at the end of a four-day conclave of its 205-member Central Committee on Tuesday that it aimed to achieve "decisive results" by 2020, and gave markets a more prominent role.
By setting an unusually explicit self-imposed deadline and establishing a special working group, the new administration of President Xi Jinping and Premier Li Keqiang suggested a more decisive reform push than under the previous leadership.
But while the communique mentioned several reform areas Beijing aimed to tackle, its language was even more general than some had expected and it explicitly underscored the importance of the state sector for the economy.
"State-owned enterprise reform is a big disappointment," said Gary Liu, deputy director of the CEIBS Lujiazui International Finance Research Center in Shanghai.
"But the implementation will be even more important than the plan itself."
All major Chinese stock indexes opened down, lagging Asian shares.
By 0230 GMT, the CSI300 index, which tracks China's largest listed companies in Shanghai and Shenzhen, was down 1.4 percent and the Shanghai Composite Index was off 1.1 percent. The index of Chinese enterprises listed in Hong Kong fell 1.8 percent.
All the indexes were dragged down primarily by financial stocks, in particular major state-owned banks, seen as the key levers through which Beijing controls the economy.
Other Chinese financial markets were flat, with the yuan trading steady and short-term money market still dormant at time of reporting.
Global markets also gave the outcome of the conclave little attention, focusing instead on when the U.S. Federal Reserve might start to rein in its economic stimulus measures.
Investors have been waiting for the official statements of the party meeting for signs of the government's intentions toward both financial markets and the companies that participate in them.
Explaining the new approach to reforms, official news agency Xinhua said in an editorial on Wednesday that rather than playing a role of markets in a system dominated by the state, the government would seek to accomplish its goals in conditions determined by markets.
"The state should exercise the government's role under the domination of the market, rather than exercising the market's role under the domination of the government," Xinhua said.
Lew said one test of the reform would be how the likes of the Shanghai free trade zone, launched in September, is developed.
"There have to be some details underneath it that open up markets in financial services and other things to competition," he said.
However, the communique did not commit to any radical move to weaken the role of state-owned enterprises (SOEs) in the economy.
In the short term, some equities analysts argue leaving state industry reform off the table is not implicitly negative for equity indexes, dominated by state owned enterprises, in particular banks, which could see margins hurt by increased competition with private companies.
However, some economists believe that reforming market mechanisms without reforming market participants risks further distortions.
"As long as the government does not allow large SOEs to fail, they will be more credit worthy than private sector rivals," wrote Mark Williams and Qinwei Wang of Capital Economics in a research note.
"In these circumstances, the state sector could end up the major beneficiary if investment controls are relaxed and the financial sector further liberalised."
Domestic media, which must operate under guidance from the central government, reacted positively to the plenum, with many running long special sections on the reform accompanied by editorials.
However, an editorial in the Global Times, an influential tabloid published by the official People's Daily, warned of the risk entrenched interests still pose to market-based reform.
"With the advancing of reform, we should firmly oppose vested interest groups," the editorial read.
"If we don't seek a consolidation of group interests and whole social interests, reform will be an empty slogan."