A BRUISING three-day selloff left Chinese stocks with their biggest weekly loss in five years last week, as investors took pause after a breathtaking rally in 2015 and authorities clamped down on risky bets.

    The benchmark Shanghai Composite Index, though up 2.28 percent Friday, lost 5.3 percent last week, its worst performance since May 2010. The CSI300 index climbed 2 percent to 4,558.40 Friday, but posted a weekly decline of 4 percent, the biggest in one and a half years.

    The poor performance was triggered by signs of tighter regulatory scrutiny over margin lending, which has helped fuel a near doubling in China’s stock market over the past year despite a flagging economy.

    The volatility wasn’t entirely unexpected. Many say the market was due for a cool-down after doubling over the past 12 months and more investors are looking to take profits. A slew of new-share sales has also soaked up cash from the market.

    Even after last week’s sharp pull-back, China’s stock market is still up nearly 30 percent so far this year, the best performer in Asia, and easily outpacing major U.S. and European indices.

    Short-term volatility doesn’t put an end to China’s bull run, which “still has a long way to go,” said Fang Weiling, fund manager of Bosera Asset Management. “The stock market is tasked with propelling reform and promoting innovation.”

    The government wants the market to rise at a slower, more sustainable pace, rather than risking a sharp and unruly run-up that could end in a sudden destabilizing crash, according to Qi Yifeng, analyst at CEMB Group Ltd. (SD-Agencies)