China B-shares closed sharply lower amid a fresh wave of selling in Asia following a more than 7 pct slide on Wall Street overnight.

Japan's key index slumped nearly 10 pct and Hong Kong's Hang Seng Index fell over 9 pct amid a regional rout as fears grew that the credit crisis has tipped the global economy into recession.

All stocks in the B-share market closed in negative territory, with Inner Mongolia Yitai Coal and drinks maker Shenzhen Shenbao Industrial leading the declines.

China Vanke, the country's top property developer by market value, also tumbled over 9 pct.

The Shanghai B-share Index fell 7.71 points or 6.51 pct to 110.70, while the Shenzhen B-share Index was down 15.04 points or 5.36 pct at 265.28.

"The 7 pct slump on Wall Street triggered panic selling in Asian markets, with the hard-currency B-share market hit harder than the domestic currency A-shares," said a Shanghai-based analyst who asked not be identified.

Wall Street's slide diverted attention from fresh moves by China's securities regulator to establish sustainable cash dividend policies and facilitate more share buybacks.

"It seems the Chinese markets cannot keep themselves away from the global turbulence in the near term, although the local declines will be limited since the key index has fallen over 60 pct this year," the analyst added.

Investors await further support measures from the government, possibly this weekend when the Communist Party's Central Committee ends its plenary session.

In Shanghai, Inner Mongolia Yitai Coal tumbled 9.90 pct to 2.430 usd, while Waigaoqiao Free Trade Zone Development lost 7.78 pct to 0.403 usd.

Hainan Airlines was down 8.31 pct at 0.342 usd.

In Shenzhen, Shenbao Industria fell by the 10 pct daily limit to 2.34 hkd.

China Merchants Property Development fell 6.93 pct to 6.98 hkd, while China Vanke slid 9.54 pct to 4.93 hkd after climbing over 5 pct yesterday.

The FTSE/Xinhua China B 35 Index was down 229.79 points or 5.46 pct at 3,975.03.

The benchmark Shanghai Composite Index, which covers both A- and B-shares listed on the Shanghai Stock Exchange, closed down 74.01 points or 3.57 pct at 2,000.57, ending the week lower by 12.78 pct.

(1 usd = 6.8 yuan; 7.8 hkd)