Chinese stock trading was halted on the first day of trading in 2016 after the CSI300 index plunged by more than 7%. The CSI300 of companies listed in Shanghai and Shenzhen fell as much as 7.02% at around 1.28pm local time on 4 January, triggering the country's 'circuit breaker' mechanism and bringing trading of shares and index futures to a halt for the rest of the day for the first time.

Under the new mechanism, which only came into effect on the first day of trading this year, a rise or fall of 5% in the CSI300 triggers a 15-minute suspension in stock trading, while a change of 7% closes the market for the rest of the day. While regulators say the mechanism is designed to curb wild swings in the stock market, some investors have doubts about it.

"If the stocks fall by the 10% daily limit, I may want to sell to prevent further losses, but the circuit breaker could prevent me from doing that until the following trading day. If stocks continue to fall the next day, the result will just be more losses. I do not think this is an effective protection for investors," said one Shanghai resident.

Meanwhile, more cautious investors welcome the mechanism. "The circuit-breaker mechanism will protect retail investors in terms of giving us more time to chill and curb potential risks," said Jia Yong, a stock investor.

An analyst says the circuit breakers would certainly provide time for investors to reassess their situations, but would not change any fundamentals of the market.

"There is a higher chance that the circuit-breaker mechanism will kick in when the markets are going down rather than up. The circuit breakers can ease the ups and the downs in the market, but they will not change the supply and demand in the market, which are based on fundamentals and capital flows. The new mechanism will not change overall trading trends," said Yu Mingming, a senior quantitative analyst at Industrial Securities.

Some analysts also question the effectiveness of circuit breakers while the 10% daily price-movement limit on A-shares remains in place. Some say these limits should be removed since the circuit-breaker mechanism has been in place. Market regulators say they are to consider future changes based on market responses to the new system.