HONG KONG (MarketWatch) — It promises to be another fraught week for Chinese shares after Beijing intensified efforts over the weekend to try to shore up confidence with a frenzy of new support measures. In a little over three weeks, roughly $2.8 trillion has been wiped off Chinese shares.

Rather than calming nerves, however, Beijing’s actions have not only been mostly ineffective, but they’ve also focused attention on why China is so fearful of an equity correction.

The latest salvos to boost the market came in the form of a new stock-stabilization fund, a moratorium on new issues and a liquidity pledge from the central bank.

According to a statement by the Securities Association of China, 21 brokerages will invest some 15% of their net assets in the new 120 billion yuan ($19.3 billion) fund.

This always looked too small to have much impact beyond a few hours, as stock turnover in Shanghai regularly exceeds 1 trillion yuan. The Peoples Bank of China will also provide liquidity to the state-backed margin lender, China Securities Finance, that can be used to lend to brokerages.

There are precedents for state-backed stock support schemes in Asia, although the experiences of South Korea and Japan in this regard are not good, as markets there continued to slide.

In another move to help protect the market, it was also reported that 28 companies had agreed to withdraw their initial public offerings. And all this comes after other unorthodox measures introduced last week, such as allowing the roll-over of margin loans and letting property be used as collateral.

This flurry of panicky-looking measures is causing some head-scratching.

Bull markets are obviously more popular than bear markets, yet after a 150% rise in Shanghai shares SHCOMP, -0.63% over the previous 12 months, Beijing should have been able to see a correction coming. Indeed, some analysts say the impact on the real economy from a share slide should not be too significant.

According to the Chinese Household Finance survey in 2013, quoted by Société Générale, stocks accounted for less than 10% of household assets. SocGen also notes that there has been little evidence of a positive wealth effect on the way up, according to retail figures, suggesting stocks aren’t that big a factor.

But perhaps there is a simpler explanation for Beijing’s extraordinary efforts to support equities: It created this bull market. Keeping it going is now seen as a test of the Communist Party’s strength, and possibly even its legitimacy.

If you created the boom, arguably that also puts you on the hook for the bust. For the government, this means the fallout will not just be economic, but could also be political and social too.

Since last year, stocks had been cajoled higher through a mixture of cheerleading from state media and accommodative policy measures. As the People’s Daily, the official mouthpiece of the party, declared earlier: “4,000 points is just the beginning of China’s bullish market.”

The very visible hand of the state was involved in the systematic underpricing of IPOs and in steering margin financing towards equities for the first time. All this prompted the opening of 30 million new trading accounts this year by novice investors — many on margin — promised easy riches by their government.

So this takes us to the current point where controlling the market has been elevated to a test of strength for Beijing and its state-led model.

In China, it shouldn’t be too much of a stretch to believe that the government has the ability to control stock prices through force of will. Beijing has a long history of being able to bend market forces to meet its ends — from interest rates, currency values and the movement of capital in its captive financial system.

But as shares continue to slide regardless of government action, investors are increasingly not buying the government line and, more ominously for President Xi Jinping, they are less willing to believe that he and the party are indeed all-powerful.

To get a sense of what the wider fallout from a correction could be, it helps to compare China now to its previous equity boom-and-bust in 2007.

Back then, margin financing did not exist, the country did not have debt at 280% of GDP, did not have its economic growth on a sustained downtrend, and did not have three years of industrial deflation and an overinflated property market.

The unknown is what the impact will be on wider confidence. Today, China looks much more vulnerable to a deflationary shock and capital destruction from an equity bust.

Little wonder that Beijing feels it cannot afford to lose its battle to keep its equity bull market alive.