By Hong Soon-do, Beijing correspondent, AsiaToday - Chinese stocks plunged further on Tuesday after being hit on what state media have called China's "Black Monday." The benchmark Shanghai Composite Index fell 7.63 percent to close at 2,964.97 points, falling below the 3,000 level for the first time in eight months. The Shenzhen Component Index sank 7.04 percent to close at 10,197.94 points. The worst thing is that the situation won't get any better in the coming days.

Investors gathered in the customer lounge of a stock trading firm in Beijing./ Source from Cankao Xiaoxi

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According to Beijing stock experts on Tuesday, China stocks plunged as the Chinese government support measures failed to revive confidence among investors. In fact, the government's measures prove that such assertion is not an exaggeration. Since mid-June, the government has restricted short selling while mobilizing Chinese police. But it failed to prop up the stock market. China lowered interest rates and deposit-reserve ratio every time the stock price fell. It wasn't effective at all. China's central bank - the People's Bank of China - provided large-scale liquidity support and even allowed its huge pension fund to invest in stock market. However, these attempts failed to stop the market slump.

On August 24 and 25, the government didn't even provide any measures to rescue the market unlike in the past. It was obvious that investors' confidence shrank. As a result, a massive sell-off hit the market. Besides, too much intervention from the government caused the Chinese stock exchanges to completely lose their autonomy as well as their self-regulatory power. Even if it could recover autonomy, it would take a significant period of time, making things worse.

Moreover, China's economic outlook isn't bright enough to buoy investor sentiment. Not long ago, China had been embroiled in hard landing rumors. Mr. Chen, an investor in Beijing, said, "Red lights are flashing on the Chinese economy. It seems China's economic bubble is bursting. It's a desperate situation," giving a pessimistic view of the Chinese economy.