The Hang Seng Index had also tumbled 12% in the past three trading sessions to the lowest close in six years.
Following this battering, in a rare direct move to soothe investors’ nerves, Beijing on Wednesday vowed to maintain financial stability and bolster economic growth.
“We must implement the decisions and arrangements of central leadership, and substantially boost the economy in the first quarter,” a key government committee said in a statement cited by state-owned news agency Xinhua.
Government departments should “actively roll out policies that benefit the markets,” according to the statement from China’s financial stability committee chaired by Vice Premier Liu He, President Xi Jinping’s top economic advisor.
The statement also said Chinese and US regulators have achieved “positive progress” on the issue of US-listed Chinese stocks, and Beijing will continue to support Chinese IPOs abroad.
It said regulators should “complete” the crackdown on China’s major internet platform companies “as soon as possible.”
“China’s top leaders finally broke the silence to respond to the recent market selloff,” wrote Larry Hu, chief economist for Greater China at Macquarie Group, on Wednesday. “The tone of the meeting is strong, suggesting that policymakers are deeply concerned about the recent market rout,” he said.
China also eased some Covid-related policies on isolation and testing on Tuesday, which helped to lift market sentiment.
Before the changes, positive cases needed to quarantine for 14 days even after two negative PCR tests. The new guidelines now allow for seven days of isolation at home after patients are discharged.
A drop in oil prices also helped markets globally on Wednesday. China is the world’s biggest importer of energy.
— CNN’s Beijing bureau contributed to this report.
