Which mechanism halted trading after the Shanghai Composite plunged 6.9% on January 4, 2016?

Circuit breakers halted trading after the Shanghai Composite plunged 6.9% on January 4, 2016.

China introduced a new market-wide circuit-breaker system at the start of 2016. The mechanism was designed to pause trading when the CSI 300 index moved by specified percentages, giving investors time to absorb information and potentially reducing panic selling.

On January 4, the first trading day of the year, the CSI 300 reached the initial 5% threshold and trading was suspended. Later, the index reached the 7% threshold, causing the market to close for the day. The Shanghai Composite finished down 6.9%.

The system was widely criticized because the thresholds may have encouraged investors to sell before the next halt, intensifying rather than calming pressure. Chinese authorities suspended the mechanism after only four trading days. The episode is distinct from the broader Chinese stock-market turbulence that began in 2015.