As the ‘Great Fall of China’ continues, it appears that Chinese policy makers have begun to take a step back and let the markets run their course rather than intervene as they have done over the past few weeks.

Perhaps authorities have recognized that the recent measures designed to prop up the market appear to have done little, and been left with little choice but to instigate a more laissex-faire approach and watch the drama unfold.

The Shanghai Composite Index tumbled another 7.6 percent to 2,964.97 at the close, sinking below the 3,000 level for the first time in eight months.

However the FTSE bucked the trend and rallied this morning. Germany’s DAX index did the same, up 2.8% after a steep plunge yesterday, suggesting that investors may be resisting the urge to panic.

Whilst the Chinese stock market is taking a hit, growth for the world’s biggest economy is still on track at 7% for the year – still an impressive rate for any country. Australian Prime Minister Tony Abbott spoke out against panicking over the problems in China:

“I think it’s important that people don’t hyperventilate about these type of things.

“It is not unusual to see stock market corrections. It is not unusual to see bubbles burst in particular markets and for there to be some flow-on effect in other stock markets, but the fundamentals are sound.”