The H-share index, which tracks China's companies listed in Hong Kong, lost 1.4 per cent to 9,169.59 points, its lowest close since July 9, 2013.

The index fell 6 per cent for the week, and has had four consecutive weekly drops. It has lost 24 per cent so far this year, making it one of the world's worst-performing stock benchmarks.

Turnover was HK$69.9 billion - well down on the daily average of HK$125.44 billion for the first seven months of the year.

Major Asia-Pacific indices fell broadly, on other mixed messages. Although the European Central Bank's decision to leave its interest rates unchanged on Thursday soothed investors, nervousness before the US Department of Labour's monthly jobs report sent Japan's benchmark to a seven-month low before recovering to close down 2.2 per cent.

"The valuations of the H-shares have fallen to attractive values, if you are taking their static price-earnings ratio into consideration," said Jason Song, a strategist with Guotai Junan International.

"But long-term investors would rather wait for better opportunities to buy in. They are holding their money and waiting for clearer signals from the central government."

However, investors are actually finding that the rhetoric from Beijing is changing.

Fan Gang, a prominent member of the People's Bank of China's monetary policy committee, said that the government was posing as an "exceptionally negative driver". The idea of China's stock markets being policy-driven was "bankrupt", he added.

Fan's comments in Shenzhen, posted online on Thursday, follow vain attempts by the central government to rescue the mainland stock market from a severe slump, and indicated a new gulf has opened up publicly in top policymaking circles on the sustainability of long-term state support for China's faltering stock market.

"The market has its own cycles. It is not up to the government to dictate its moves," the quoted Fan as saying. "The government must desist from encouraging stock market movements in its upward cycle."

Fan said retail investors should quit speculating in stock markets. "There are risks in speculation," he said. "It is for professionals. Without at least four computer screens to look at this index, that index, you are not qualified."

On August 25, Li Jiange, chairman of Shenyin & Wanguo Securities and a vice-chairman of China Investment Corp strategic investment arm Huijin, said: "The biggest risk in China now is to walk backwards after 30 years of reform."

Li added: "What is the biggest risk in China now? It is not the stock markets. Chinese citizens have a level of tolerance after years of tumultuous cycles. The rise of nationalism is a very chilling idea," he said, in comments that could be interpreted as criticism of continued state rescue efforts.

Huijin had just taken over some 20 billion yuan worth of stocks from China Securities Finance when Li made the comments.

US job growth slower than expected

US payrolls rose less than expected last month, but a drop in the unemployment rate to a near 71/2-year low of 5.1 per cent and an acceleration in wages kept alive prospects of a Federal Reserve interest rate increase later this month.

Nonfarm payrolls increased 173,000 as the manufacturing sector lost the most jobs since July 2013, the labour department said on Friday. It marked a slowdown from July's upwardly revised gain of 245,000 and was the smallest rise in employment in five months.

The report, however, may have been tarnished by a statistical fluke that in recent years has frequently led to sharp upward revisions to payroll figures for August after initial weak readings.

Indicating that the slowdown in job growth was likely not reflective of the economy's true health, payrolls data for June and July were revised to show 44,000 more jobs created than previously reported.

In addition, average hourly earnings increased eight US cents, the biggest rise since January, and the workweek rose to 34.6 hours.

"The payrolls data is certainly good enough to allow for a Fed rate [rise] in September, the big question is still whether financial market volatility will scupper the plans," said Alan Ruskin, a global head of currency strategy at Deutsche Bank.

The US dollar trimmed losses after the data, while prices for Treasury debt pared gains.

While the report may not change views that the US economy remains vibrant amid volatile global financial markets and slowing Chinese growth, it could further complicate the Fed's decision at a policy meeting on September 16 and 17.

In the wake of a recent global equities sell-off, financial markets significantly scaled back bets on a September rate increase over the past month. But Fed vice-chairman Stanley Fischer told CNBC last week it was too early to decide whether the stock market rout had made an increase less compelling.

A survey of economists had forecast nonfarm payrolls rising 220,000 last month, but economists said the model the government used to smooth the data for seasonal fluctuations might not adequately account for the start of a new school year.

Reuters