China stocks plunge despite government assurances


Chinese shares fell for the second day Tuesday despite government efforts to address concerns about the slowing economy.

The benchmark Shanghai Composite opened down 2.28 per cent and dipped further to close down 3.52 percent at 3,005.17 points, veering toward the symbolic 3,000-point mark.

The Shenzhen Component Index closed down 4.98 per cent and the ChiNext Index, which tracks tech and other growth companies, lost 5.70 per cent.

The Shanghai exchange has suffered from high volatility in recent months, leading to a series of official measures aimed at stabilizing prices and reassuring investors about the strength of the Chinese economy.

The drop in share prices came after government statistics revealed on Sunday that growth in industrial production was lower than expected, at 6.1 per cent.

Prime Minister Li Keqiang promised to relax restrictions on foreign capital in financial markets, and said the country would meet its economic targets.

“It’s true that the economy has come under downward pressure,” he said.

“But the Chinese economy will not have a hard landing,” he said Thursday at the so-called Summer Davos forum in Dalian.

The Shanghai index recently lost all the gains it made in 2015, which sparked a round of selling by investors around the world.

Analysts say China may struggle to meet its growth target for 2015 of about 7 per cent amid sluggish investment growth and falling exports.