The Shanghai Composite tumbled 6.85 percent to 3296.66 and the Shenzhen Composite plunged 8.1 percent. The CSI 300 briefly plummeted 7.02 percent; when that index rises or falls 7 percent, a trading halt in China's markets is triggered for the rest of the session.
Stocks in Australia, Japan, South Korea and India also fell. Energy plays, however, saw gains after oil prices bounced during Asian trading hours.
Hong Kong's Hang Seng index was also down 2.8 percent at 21,302.Gavin Parry, managing director at Parry International Trading, said several factors could explain the sell-off in the Chinese markets. First, he noted the lower-than-expected manufacturing report that was out over the weekend, followed by the Caixin survey released earlier in the morning.
Parry said everyone is "still focusing on the industrial side of things."
The geopolitical situation in the Middle East is also a point of concern for market watchers. Parry said China has sizable investment in Iran's oil industry. The escalation of Iran's tension with Saudi Arabia will likely weigh on expectations.
By: CNBC.
Review: Emerging Market Formulations & Research Unit, Flagship Records.
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