Chinese stocks have resumed their downward trend despite a seven percent rise in the country's gross domestic product (GDP). Stocks started their descent Tuesday and kept falling until the close of Wednesday's trading.

Market Watch reported that the Shanghai stock market was able regain around 13 percent of its value during last week's trade. However, Wednesday's trade resulted in a loss of around three percent in the Shanghai Composite. Meanwhile, the slump spread to the Shenzhen market which lost 4 percent, while ChiNext's loss was at five percent.

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Sydney-based Mine Life Director Gavin Wendt said that the recent economic data may indicate that the Chinese economy is starting to bounce back. He also added that economic activities during the last half of the year are usually positive. The Chinese government is likely to introduce additional incentives to keep the upward momentum of the economy going, according to The Telegraph.

Bloomberg Business reported that securities regulators have stopped investors from selling the shares of around 67 percent of the companies listed in China's stock index. To prevent another massive sell off, authorities suspended the trade of around 700 Chinese stocks in the mainland market. More than a thousand stocks followed suit after losing ten percent of its value during trading on Wednesday.

After a series of government incentives and actions, Chinese shares climbed up, but three days of gains gave way to another wave of sell offs. Winnington Capital broker Jeffrey Chiu said the current sell off indicates that investors are cashing in on the recent gains made in last week's stock trade.

Foreign observers have expressed the opinion that many Chinese stocks would continue to fall in value since they were pricey to begin with. The belief that many shares in the China's stock market are still overvalued is one possible reason why foreign investors are selling their stocks and leaving the market.

Chinese authorities hope that the measures they have put in place will assure investors of their determination to support the market at all cost. But despite government efforts, many investors are still not convinced.

TagsChina stock market, China Stock Manipulation, China Stock Market News, Shanghai Composite Index, Shanghai Stock Exchange, chinese shares, Chinese Stocks, Chinese Stocks Plunge, Shenzhen Stock Exchange