Having claimed ‘foreign interests' were “waging an economic war” against China, it was ironic that the most outspoken of Chinese SOEs is now under investigation for ‘selling' shares when it was told not to. As Reuters reports, China is extending its dragnet for “malicious sellers” to Hong Kong and Singapore as the witch hunt blame-mongery continues, Rather ominously, the China Securities Regulatory Commission (CSRC) has demanded trading records to try to identify those with net short positions who would profit in case of further falls in China-listed shares, three sources at Chinese brokerages and two at foreign financial institutions said. Even more incredibly, as Bloomberg reports,despite total ignorance by US regulators, China is ‘daring‘ to crackdown on market manipulation via ‘spoofing'.

China is pressing foreign and Chinese-owned brokerages in Hong Kong and Singapore to hand over stock trading records,As Reuters reports,  extending its pursuit of “malicious” short sellers of Chinese stocks to overseas jurisdictions.

The markets regulator, the China Securities Regulatory Commission (CSRC), wants the trading records to try to identify those with net short positions who would profit in case of further falls in China-listed shares, three sources at Chinese brokerages and two at foreign financial institutions said.

At its regular press conference on Friday, the CSRC said it had not directly contacted top executives at Hong Kong brokerages. It also noted that it was normal, in the course of an investigation, to reach out to “relevant parties”.

The regulator has declared war on “malicious short sellers” or those it deems are trying to profit from a fall in share prices, rather than adopt a short position as a financial hedge.

“The implied threat by the CSRC is that anything that is not a hedge is a no-no,” said a source in Hong Kong with knowledge of the requests. This person added that foreign brokers were likely to comply as best they could with the requests.

“When the CSRC makes an offer, you cannot refuse it.”

The CSRC has no regulatory power in Hong Kong or other jurisdictions, such as Singapore and the United States, where investment products tracking mainland shares are listed, and can be legally shorted.

But market sources worry that Chinese regulators are intent on suppressing any attempt to profit from China's sliding markets, including trying to suppress even legal investment behavior by referring to it as “malicious” or otherwise irregular.

At the same time, the government is trying to rally retail investors who dominate trading in China to put money back into the market, a task made more difficult if investors offshore are making bets on falling prices.