The benchmark Shanghai Composite slid into bear market territory on Tuesday, closing more than 20% below its recent high in January. The index fell 0.5% on the day. Chinese stocks have come under pressure in recent weeks from concerns over an economic slowdown and an emerging trade war with the United States.
The trade fears have intensified this week following reports the US government is set to announce restrictions on Chinese investment in American companies, potentially escalating the confrontation between the two giant economies, analysts said.
“It’s a combo effect of concerns about the trade war and China’s GDP growth,” said Dickie Wong, head of research at Hong Kong-based broker Kingston Securities.