The benchmark Shanghai Composite Index also fell by 2 per cent. The turbulence also affected US-listed Chinese tech shares, which slumped on the New York Stock Exchange.

Online retailer Alibaba, which has been branded the Amazon of China, and tech giants Tencent, JD.com and Baidu all suffered double-digit declines.

In all, $US89 billion was wiped off the Nasdaq Golden Dragon China Index of 65 leading Chinese stocks, which fell by 15 per cent. The offshore yuan fell to the lowest level against the dollar since it started trading in 2010.

Xiadong Bao, a fund manager at Edmond de Rothschild Asset Management in Paris, told Bloomberg it was a “true capitulation moment”, saying events at the Communist Party Congress gave investors “a really bad sign, saying what we’ve experienced so far can be prolonged by another five years.”

Xi doubled down on the country’s zero-tolerance approach to COVID during the twice-a-decade national congress that ended last weekend.

He said that the government had “protected people’s safety and health to the highest degree,” and “achieved significant positive results in coordinating epidemic prevention and control and social and economic development”.

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The International Monetary Fund (IMF) warned this month that the Chinese economy would expand by just 3.2 per cent this year amid strict COVID controls and a property crisis that has triggered a wave of debt defaults.

Christine Lagarde, the IMF’s former managing director, has warned that the country would only expand by “around 2 per cent” this year, which would be the slowest growth since the 1970s.

Wei Yao, at Société Générale, said: “The growth outlook remains challenging amid the zero-COVID policy and the housing downturn.

“While a small recovery in the housing sector can be expected as policymakers are stepping up easing measures, an immediate exit from zero-COVID policy has become less likely.”

She predicts Chinese growth of about 3.5 per cent this year.

Telegraph, London

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