Reuters reports, "China's markets regulator has frozen a trading account linked to Citadel Securities, a unit of the U.S. group that also owns hedge fund Citadel LLC, as Beijing battles against speculators to prop up China's ailing stock markets. The regulator, which has declared war on "malicious" short selling, has been at the forefront of a government-orchestrated campaign to prevent a meltdown in the two main stock markets, which have tumbled some 30 percent since mid-June. The Shanghai .SSEC and Shenzhen .SZSC markets fell again on Monday, undermined by fresh concerns over the health of the world's second-largest economy. Factory activity shrank more than initially estimated in July, contracting by the most in two years as new orders fell and dashing hopes that the economy may be steadying, a private survey showed on Monday."
"Asian shares fell Monday, as a measure of China's factory activity hit a two-year low and investors continue to seek clarity about Beijing's role in rescuing the stock market. The Shanghai Composite ended 1.1% lower at 3622.91, after falling as much as 3% earlier Monday. The smaller Shenzhen Composite closed down 2.7% at 2053.12 and the small-cap ChiNext Price Index fell 5.5% at 2399.27. Hong Kong's Hang Seng Index fell 0.9%, while a gauge of Chinese companies listed in the city fell 1.1%. Earlier Monday, a gauge of China's factory-floor activity fell to a two-year low, adding to worries about the country's struggling stocks, sluggish property market and weak demand at home and abroad," writes The Wall Street Journal.
Reuters writes, "Chinese Vice Foreign Minister Liu Zhenmin said on Monday the disputed South China Sea should not be discussed at a meeting of the Association of Southeast Asian Nations (ASEAN). Liu, speaking to Reuters on the sidelines of the 48th ASEAN Foreign Ministers Meeting, which kicks off in Kuala Lumpur on Tuesday, said the meetings should avoid all talk on the sensitive issue, adding that countries outside ASEAN should not interfere. 'It should not be discussed,' said Liu. 'This is not the right forum. This is a forum for promoting cooperation. If the U.S. raises the issue we shall of course object. We hope they will not.' The issue was not on the official agenda, but expectations had been high that it would be discussed against a backdrop of increasing tensions and overlapping claims in the potentially energy-rich South China Sea.