Chinese shares slump on policy change fears

Investors are worried the government may clamp down on asset prices

Leading Chinese shares have slid ahead of a key government economic meeting with investors wary of the outcome.

The benchmark Shanghai Composite Index fell 119.2 points, or 3.6%, to 3,170.98, the market's biggest daily fall in almost three months.

There are concerns that the government may introduce measures to clamp down on rising asset prices, including shares and property, analysts said.

On Tuesday, shares fell 3.5% on fears banks would need to raise more capital.

This followed an order by regulators at the start of the week that banks needed to control lending and manage risks better.

These fears also contributed to the latest share slump, analysts said.

"Worries about fund raising in the banking sector dragged down the index while rumours of a possible shift in economic policy spread ahead of China's central economic meeting, so investors locked in profits due to uncertainties," said Li Wenhui at Huatai Securities.