The CSI300 Index dipped 0.9% by the lunch break, having touched levels not seen since February 2019. The Shanghai Composite Index also declined 0.9%.

In Hong Kong, the benchmark Hang Seng Index dropped 2%, led by tech shares.

There are signs of rising geopolitical tensions ahead of Taiwan’s elections this weekend.

Taiwan’s defence ministry said it detected three more Chinese balloons flying over the Taiwan Strait on Sunday. The ministry on Saturday accused China of threatening aviation safety and waging psychological warfare on the island’s people with the balloons, days before key Taiwanese elections.

Meanwhile, China’s foreign ministry said on Sunday the country will sanction five US military manufacturers in response to the latest round of US arms sales to Taiwan.

“Geopolitics remains a major focus – and, looking at the current macro environment, deglobalisation resulting from tensions between countries has the potential to split the world into a series of incompatible economies, leading to an unstable global economy,” Eugene Qian, China Country Head of UBS told the UBS Greater China Conference on Monday.

Regarding China’s economy, “the property market remains fragile, with investor sentiment and activities settling at a lower level.”

Investors ignored news that Beijing informally asked some money managers in China to prioritise the launch of equity funds over other products, deeming such measures ineffective in drumming up confidence.

Most sectors in China fell. Shanghai’s tech-focused STAR50 Index dropped more than 2% to fresh record lows.

In Hong Kong, the Hang Seng Tech Index tumbled 3.2% to the lowest level in 13 months. An index tracking Chinese developers dropped 2.1%.