Beijing's failure to stabilize the country's chaotic stock markets is undermining its credibility on the international stage and deepening investor worries about the slowing economy, according to commentators.
Fresh measures to staunch the recent bleeding in mainland equities emerged on Tuesday. More than 200 China-listed companies announced they were suspending share trading, state media outlet Securities Times reported. 700 companies listed in Shanghai and Shenzhen have asked for trading halts or extensions since mid-June, when local markets began their plunge, Reuters said.
The unconventional steps came just hours after Premier Li Keqiang said the government was confident it could deal with economic challenges, according to an official statement, and following a dramatic weekend where Beijing unveiled a number of stabilization efforts, such as halting new share offerings.
"When you have the government doing everything possible to halt declines, that raises a red flag as far I'm concerned," Peter Cardillo, chief market economist at Rockwell Global Capital, told CNBC on Tuesday.
"Chinese authorities have staked their reputations and credibility on stopping this stock market crash. That could be politically risky if they are seen to fail," echoed Patrick Chovanec, chief strategist at Silvercrest Asset Management.
Indeed, the market-boosting measures don't seem to be working as intended. The Shanghai and Shenzhen Composites slumped 4 and 5 percent respectively in morning trading on Tuesday, chalking up losses of 25 and 30 percent over the past month.
"State-owned newspapers have used their strongest language yet, telling people 'not to lose their minds' and 'not to bury themselves in horror and anxiety.' Despite the People's Bank of China (PBoC) and Chinese government's attempts to dam the outflows, it appears to be futile," said Evan Lucas, market strategist at IG, in a morning note on Tuesday.