DOMESTIC media yesterday called a recent selloff on mainland stock markets an “irrational overreaction” and urged investors not to panic over the Sino-U.S. trade frictions.

The comments, made in newspapers such as the Securities Daily and Economic Daily, come as the Shanghai exchange dove to more than a two-year low Monday as the trade spat threatens to knock the world’s second-largest economy.

“Intensifying trade frictions between China and the United States is a test that the Chinese economy inevitably had to experience during its rise,” the Economic Daily said.

“We have long anticipated and prepared for this. The impact on the Chinese economy is within a controllable range.”

The Securities Daily newspaper called the slump in the A-share market an overreaction, saying that investors should have confidence in China’s domestic market and that the current macroeconomic situation was stable.

Investors are jittery ahead of a July 6 deadline when the United States is set to impose tariffs on US$34 billion worth of goods from China, the epicenter of a heated trade dispute between Washington and major economies that has convulsed financial markets.

Li Yang, director-general of government think-tank National Institution for Finance and Development, told the Global Times newspaper that he did not think the financial panic would evolve into a wider financial scare and that authorities had proven effective in the past to pacify market sentiment.(SD-Agencies)