Trading on the Shanghai and Shenzhen stock markets was suspended on Monday after shares fell more than five per cent.
The 5.05 per cent drop in the CSI300 index, which covers 300 firms on both bourses, for the first time triggered an automatic 15-minute trading halt under a newly-introduced system to curb volatility.
The falls followed poor data from official and private surveys of manufacturing in the world’s second-largest economy, and with the expiry looming of measures brought in to curb China’s mid-2015 share slump.
“The market is worried about the upcoming lifting of the rule that bans shareholders from selling,” Central China Securities analyst Zhang Gang, told the news agency.
“Pressure will continue to weigh on the market in the coming days.”
As trading was suspended, the benchmark Shanghai Composite Index had tumbled 4.96 per cent, or 175.66 points, to 3,363.52.
The Shenzhen Composite Index, which tracks stocks on China’s second exchange, slumped 6.66 per cent, or 153.76 points, to 2,155.15.