Fears over the coronavirus triggered a sharp fall in Chinese shares when the market reopened after the Lunar New Year holiday.
The Shanghai Composite index closed nearly 8% lower, its biggest daily drop for more than four years.
Manufacturing, materials, and consumer goods companies were among the hardest hit, while healthcare shares soared.
The fall came despite China's central bank announcing new measures to ease the impact of the outbreak.
The People's Bank of China (PBOC) unexpectedly lowered short term interest rates as part of its attempts to relieve pressure on the economy from the rapidly spreading virus.
It also pumped an extra 150 billion yuan ($22bn; £16.3bn) into the economy on Monday, a move aimed at ensuring there is enough liquidity in the banking system.
In total, the central bank will inject 1.2 trillion yuan into the financial system, the majority of which was already planned.
The PBOC said it could make more cash available throughout the week, as Chinese financial regulators forecast the impact on the country's already slowing economy will be "short term".
The coronovirus outbreak comes as China's economy, which is the second largest in the world after the US, is slowing, following the trade war between Washington and Beijing.
China saw economic growth of 6.1% last year - the weakest expansion in around three decades. A partial trade deal easing tensions was signed earlier this month, but most tariffs remain in place.
The falling share prices in China come after global markets were rattled by the epidemic in recent days. Last week, Wall Street's S&P 500 index notched up its worst week since October.