The Shanghai Composite index shed 2.7% to 2,687.9 points, dashing hopes that February 26 brief recovery could be sustained.
The index was down as much as 4.4% in the morning, hitting a 15-month low.
The losses came despite the G20 meeting in Shanghai over the weekend pledging to work towards boosting growth both in China and globally.
The yuan edged lower against the dollar as the central bank set a softer midpoint of 6.5452 per dollar – the lowest in almost one month.
Hong Kong’s Hang Seng also lost ground, but fared better than the mainland, closing down 1.3% at 19,111.9 points.
Japanese shares also failed to extend their gains from February 26, trading flat as the government released mixed economic data.
The latest figures showed industrial output rose by 3.7% in January, the first increase in three months.
However, retail sales disappointed, falling by 0.1% in January, compared to forecasts for a 0.5% rise.
The Nikkei 225 index closed 1% lower at 16,026.7 points.
Gaming giant Nintendo’s shares finished the day 0.5% down after dropping sharply by 5% at one point in early trade.
The drop came after February 26 announcement that its full-year profit would be half of its original forecast.
Due to a stronger yen and disappointing sales of its handheld gaming consoles and software, the company slashed its full-year profit outlook to 17 billion yen, down from the previously expected 35 billion yen.
In Sydney, the ASX 200 closed flat at 4,880.9 points.
In South Korea, the benchmark Kospi index also finished the day flat at 1,916.6 points.
Samsung shares rose by 1.3% following February 26 decision by a US appeals court to overturn a verdict against the company in a longstanding patent dispute with Apple.
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