Beijing also announced curbs on margin borrowing Monday as a way to obviate the excesses that led to the $5 trillion summer rout. According to the Shanghai exchange, the move will help diminish leverage and ensure “healthy development” of the market.

“While it might have a negative impact in the very short run, I think ultimately it’s a very good thing in the long run,” Brendan Ahern, managing director at Krane Fund Advisors LLC, the sponsor behind the KraneShares Bosera MSCI China A ETF (NYSEArca: KBA). It will “certainly will help de-risk, or take down, some of the inherent volatility in the market.”

Market Vectors ChinaAMC SME-ChiNext ETF

For more information on China, visit our China category.

Max Chen contributed to this article.

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