The benchmark was trading at its highest level in about 8 months on the news that the truce in a trade war between the world's two biggest economies would persist as the two sides talk out their differences.
Other markets in the region also rose, but by smaller margins. Hong Kong's Hang Seng index added 0.5 percent while Tokyo's Nikkei 225 also climbed 0.5 percent.
President Donald Trump's decision to extend a deadline to escalate tariffs on Chinese imports has raised cautious optimism in China and boosted share prices across Asia.
The Shanghai Composite index jumped 4.9 percent on Monday to its highest level since June 2018 after Trump said "substantial progress" was made in weekend talks between the two countries regarding their dispute over China's technology policies.
Trump said, "I will be delaying the U.S. increase in tariffs now scheduled for March 1." He also said that if negotiations progress, he will meet with Chinese President Xi Jinping at his Florida resort to finalize an agreement.
The vice president of the U.S.-China Business Council, Jake Parker, said Trump's announcement was a "positive signal."
Others in Beijing had mixed feelings, but welcomed the news.