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But Claude Barfield, scholar at the conservative American Enterprise Institute, noted that China's growth rate "doesn't seem to be anything close to a crisis".

He added that the government would take more measures to support the economy. The Shanghai index, which in the morning fell to its weakest level since November 21, 2014, was up 0.9 percent in the early afternoon.

The benchmark Shanghai Composite index touched its lowest level in almost four years yesterday before closing down 2.9 per cent, dragged down by falling energy shares hit by cheaper oil and by widespread concern that plunging share prices could lead to a spike in margin calls.

The Dow Jones Industrial Average .dji fell 1.27 percent, the S&P 500 .spx lost 1.44 percent and the Nasdaq Composite .ixic dropped 2.06 percent.

Shares on China's Shanghai Composite Index sank 3 percent Thursday on concerns margin calls may drive prices lower and that the government might have to intervene to maintain calm in the financial markets of the world's second largest economy.

China's economy grew 6.5 percent in the third quarter from a year earlier, falling short of market expectations and marking the weakest pace since the global financial crisis, data showed on Friday.

But following the data, some say growth could slow even more dramatically next year.

"We doubt the latest pick-up in infrastructure spending will be enough to prevent the economy from cooling further in the coming quarters", said Julian Evans-Pritchard of Capital Economics. "Property investment continues to hold up which may provide some support".

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Yi and senior regulators pledged targeted measures to help ease firms' financing problems and encourage commercial banks to boost lending to private firms.

While the policy statements helped to calm investors, it may take a few rounds of support before confidence is fully restored, as was the case during the 2015 market rout, said Zhang at Haitong Securities.

"The government has been aware of the negative impact from deleveraging and has swung towards easing around June, but the positive impact is yet to be felt", he said.

"There's been no discernible impact on end demand that we've seen yet from our industry contacts", Vinesh Motwani of Silk Road Research told me, after a recent trip back from Beijing and Shanghai. China's vice premier Liu He, who oversees the economy and financial sector, also chimed in to bolster sentiment.

CNBC notes that many outside experts have expressed skepticism about the reliability of the financial statements of China.

The Trump administration argues that China has more to lose in a trade war - and will face pressure to reach a truce because it exports more than it buys from the United States and because its economy is decelerating while the USA economy looks strong. Significantly, China's factory output growth has weakened to 5.8 per cent in September from a year earlier, while fixed-asset investment expanded at a slightly faster-than-expected 5.4 per cent in the first nine months of the year.

"The 6.5 percent figure is definitely below our consensus expectations".

After starting the day in negative territory, Shanghai ended yesterday 2.6 per cent higher, while Hong Kong also performed a u-turn to gain 0.4 per cent.