A deepening sense of unease is rippling through China's financial markets.

The benchmark Shanghai stock index has tumbled 20 per cent in just five months to enter a bear market. The yuan is heading for its longest losing streak in four years in Hong Kong. Corporate defaults are mounting.

There are homegrown reasons for the concern: The nation's deleveraging campaign is reducing the amount of liquidity available - threatening growth in the world's second-largest economy. Then throw in an unpredictable trade war with the US, and investors are facing a long list of reasons to sell.

Official efforts to calm nerves, from cutting reserve ratios to publishing upbeat editorials in financial newspapers, have had little effect so far. The Shanghai Composite Index's failure to hold above 3000 - long seen as a level that would prompt state intervention - has reduced appetite for bargain hunting. The gauge has been technically oversold for the past six days, the longest stretch since 2013, and losses in the stock market have totaled $US1.8 trillion ($2.4 trillion) since January.