CHINA’S stocks fell yesterday after data suggesting economic growth was running below the 2015 target level of about 7 percent heightened concerns about the health of the economy.

    The economic concerns offset the impact of plans announced at the weekend to reform the State-owned enterprise sector and produce decisive results by 2020.

    Underscoring the fragility of China’s financial markets even after some respite last week, currency traders suspected the central bank intervened to prop up the yuan in onshore markets, which wobbled following a report that net capital outflows in the first quarter of the year were more than US$100 billion.

    “China’s economy faces relatively big downward pressure, so investor sentiment remains weak,” said Gu Yongtao, strategist at Cinda Securities.

    China’s stock market has been on a roller-coaster ride in the past few months, falling close to 40 percent since June and prompting frantic efforts by authorities to restore confidence.

    A devaluation of the yuan in August further roiled markets, reinforcing concerns the economy was weaker than previously thought and forcing China to burn through its foreign exchange reserves to keep the currency stable.

    A flurry of economic data in the past week have fed those concerns and prompted Premier Li Keqiang to try to reassure markets that China is on track to meet its main economic growth targets. The government has said it expects economic growth of around 7 percent this year.

    Price data pointed to increased deflation pressure and lower-than-expected industrial output and investment figures this weekend raised further doubts.

    China’s benchmark CSI300 index of the biggest listed stocks in Shanghai and Shenzhen closed down 1.97 percent, while the Shanghai Composite Index dropped 2.67 percent.

    China CSI300 stock index futures fell, some by as much as 7 percent, underlining investor scepticism in the stock market’s upside potential.

    Government plans on restructuring of State-owned enterprises, including allowing private investment, appeared to offer little for investors to feed off.

    “The plan has long been expected,” said Gu. “So interest toward the theme could be short-lived.” (SD-Agencies)