The Shanghai Composite Index dropped as much as 1.7 percent on Monday, and was 0.8 percent lower at 11:27 a.m. local time.
Small-cap shares bore the brunt of the selling, with the ChiNext gauge tumbling as much as 2.5 percent.
Chinese brokerages declined, with China Galaxy Securities Co. losing 5.4 percent and Orient Securities Co. dropping 2.4 percent in Shanghai.
Here are some of the highlights of today's trading:
- The slide in Chinese stocks came after a period of calm through the recent Communist Party Congress, as sovereign bonds extended a monthly rout.
- That largely overshadowed gains on Wall Street on Friday after U.S. gross domestic product added to evidence of an improving global economy.
- Investors are concerned that the government will step up efforts to reduce leverage in the financial sector.
- China's level of leverage is rising at an "alarming pace", particularly in the finance sector, a senior central bank official said earlier this year.
- The Bank for International Settlements warned last year that excessive credit growth in China is signaling an increasing risk of a banking crisis in the next three years.
(With inputs from Bloomberg)
