Chinese Small-Cap Stocks Sink as Investors Flee Uncertainty Over Delisting Rules, Growth Outlook

• Chinese small-cap stocks extended losses on Tuesday, with the CSI 2000 Index falling 7.2% this week amid fears of tighter market oversight and delisting risks

• The selloff came after China's State Council pledged to strengthen stock listing criteria and corporate governance

• Analysts say investors are pivoting toward bigger, more profitable companies given uncertain growth outlooks

• Market watchers compared the State Council's latest guidelines to past reforms that spurred capital market changes

• The guidelines also follow a rebound in Chinese stocks from February lows, dampening positive sentiment