Shanghai closed down 5.90 percent and Hong Kong stocks slumped 7.35 percent in afternoon trade, despite Chinese leaders announcing fresh measures to staunch a correction that has wiped trillions off the country's markets. Most other regional markets were also hit by the spillover effects, with many hosting companies with links to China. "China's stock market rout is now spreading to other financial markets, creating a sweeping sense of panic and liquidity crunch," said Zheng Ge, an analyst at Wanda Futures Co. Shanghai is down more than 30 percent from its closing peak on June 12, when it had risen by more than 150 percent in 12 months in a borrowing-fuelled frenzy enhanced by hopes for economy-boosting government measures.
The warmth of the friendship between Chinese President Xi Jinping and Russia's Vladimir Putin -- who meet Wednesday for the eighth time in two years -- does little to counter the bitter economic winds blowing through their shared border. In the Chinese city of Heihe, neon-lit high-rises line the banks of the Amur river facing Siberia's Blagoveshchensk powered by electricity from hydroelectric plants over the border. Cyrillic signs greet shoppers from the north, but traders say recession in Russia is hitting business.
Greece could descend into "chaos" unless a deal is found soon, the head of the French central bank, Christian Noyer, said on Wednesday. "The Greek economy is on the edge of catastrophe. The EU's Economic Affairs Commissioner Pierre Moscovici said an agreement with Greece was possible but it was up to its government to make credible proposals to its fellow eurozone members.