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The Shanghai Composite, one of China’s leading stock indexes, has seen its highest daily spike in more than two years following signs that the government will step in to support battered equity markets.

It closed up 4.1%, its biggest one-day rise since March 2016.

The moves extend a rally that began on October 19 and after investor confidence surged on assurances from Beijing.

Stocks had been falling as China’s economic growth continued to stutter.

On October 19, top Chinese financial officials – including economic adviser Liu He and the heads of the securities and insurance commissions – issued a statement to buoy investor sentiment in bruised markets.

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Over the weekend, the Chinese government published a draft of new rules for personal tax deductions, Reuters reports.

The moves come as China, the world’s second largest economy, faces challenges such as high debt levels and an intensifying trade war with the US.

The October 19 data showed that in Q3 2018, China’s economy grew at the lowest rate since global financial crisis, expanding by 6.5% from a year earlier.

The rate was a drop from the 6.7% pace in the prior quarter, but remains in line with the government’s full-year target of about 6.5%.

For years China has pushed to wean its economy off exports and rely more on domestic consumption for growth.

At the same time, the Chinese government has been fighting to contain ballooning debt driven by a wave of infrastructure development and a housing bubble without hurting growth.

In recent months the government has taken steps to support China’s economy, including cutting capital requirements to boost liquidity and ease the slowdown.

Asian shares continued to fall on September 2, with Shanghai opening down more than 4% amid continuing worries about China’s growth.

On September 1, data suggesting China’s manufacturing sector was shrinking at its fastest pace in three years ignited a global market sell-off, resulting in US stocks closing down nearly 3%.

The Shanghai Composite recovered some ground to trade down 3.6% to 3,054.17.

Hong Kong’s Hang Seng index was lower by 1.7% to 20,818.22 in early trade.

Chinese markets will close at the end of September 2 for a two-day holiday to commemorate the end of World War Two.Asian markets react to China economic data 2015

Mainland Chinese stocks have lost nearly 40% of their value since June, despite attempts by the government and regulators to prop up the market.

Meanwhile, data showing US factory activity fell to a more than two-year low in August added to the already grim sentiment among investors.

Crude oil futures also continued downwards after an 8% fall in US trade, amid concerns about slowing demand from China.

Japan’s benchmark Nikkei 225 index was up 0.8% to 18,296.67 after leading the region’s losses in the previous session, down nearly 4%.

Australia’s S&P/ASX 200 was lower by 1.2% at 5,036.60 points as economic growth figures for the second quarter came in below expectations.

The economy expanded 0.2% from the previous quarter and was up 2% compared with the same period last year.

Economists were expecting quarterly growth of 0.4% while the annual rate was forecast to be up 2.2%.

In South Korea, shares were also lower after government data showed exports fell 4.3% in July, while imports rose 0.7%.

That led the current account surplus to fall to $9.5 billion in seasonally adjusted terms from a record high of $10.7 billion in June.

South Korea’s benchmark Kospi index was down 0.3% at 1,908.50.