The Shanghai Composite Index on Monday plunged almost 8.5 per cent in its greatest fall since 2007 in spite of recent government efforts to support the market.
The main index closed 8.48 per cent down at 3,725.56, 6 per cent up from its recent July 8 low, but still 28 per cent down from its June 12 high.
An economics professor at the Beijing Institute of Technology, Hu Xingdou, said a lingering lack of confidence in the economy and the stock market was behind the fall.
“The stock market has too many bubbles and too much false information. The leverage rate is too high with no efficient regulations to solve such problems,’’ Hu said.
The Shenzhen Component Index fell 7.59 per cent to close at 12,493.05 points.
Also the Hong Kong Hang Seng Index declined 3.28 per cent to trade at 24,305.23.
China seemed to have successfully stabilised tumbling share prices in early July when its central bank injected 35 billion Yuan, approximately 5.7 billion dollars into the money market.
During that period major shareholders were forbidden from selling shares.
China’s second quarter GDP growth at 7.0 per cent growth and other major June indicators came in better than most analysts expected, although doubts lingered about the accuracy of Chinese economic data.