HONG KONG (AFP) ― Asian equities tumbled Wednesday as a collapse in Chinese shares began to contaminate other markets, and after European leaders slapped Greece with a deadline to submit fresh bailout reform proposals. 

With markets buffeted by two global crises, traders ran for the cover of investments considered safe in times of upheaval such as the yen.

Shanghai plunged 5.90 percent, or 219.93 points, to end at 3,507.19 after losing more than eight percent at one point. The losses come despite Chinese leaders announcing fresh measures to staunch a correction that has wiped trillions off the country’s markets.

In late trade Hong Kong was down 8.43 percent, the market’s biggest drop since October 2008, leaving the exchange at its lowest level since December.

Most other regional markets were also hit by the spillover effects, with many hosting companies with links to China.

Tokyo sank 3.14 percent, or 638.95 points, to 19,737.64, Seoul slipped 1.18 percent, or 24.08 points, to 2,016.21 and Sydney retreated 2.01 percent or 111.9 points to 5,469.5.

Taipei shed 2.96 percent, or 274.05 points, to close at 8,976.11.

“China’s stock market rout is now spreading to other financial markets, creating a sweeping sense of panic and liquidity crunch,” said Zheng Ge, an analyst at Wanda Futures Co.

Shanghai is down more than 30 percent from its closing peak on June 12, when it had risen by more than 150 percent in 12 months in a borrowing-fuelled frenzy enhanced by hopes for economy-boosting government measures.

However, analysts said new restrictions on margin trading and concerns about the overvaluation of many stocks have forced mainland investors ― mostly individual retail traders ― to cash out.

There are now fears that the hammering to stock markets will hit the wider Chinese economy, the world’s second biggest, which is already struggling with slowing growth.

Wednesday’s falls came despite the government announcing new measures to support the market, while Bloomberg News reported that the recent slump has led at least 1,249 companies to halt trading in the mainland, accounting for 43 percent of total listings.

Alex Wong, Hong Kong-based asset-management director at Ample Capital, added: “Gradually this will drag other markets lower because the magnitude of a China crisis would be far bigger than anything happening in Greece.”

In Hong Kong the Hang Seng China Enterprises Index ― which tracks Chinese firms listed in the city ― slumped 8.5 percent.

“Chinese investors are selling the Hong Kong market to channel the money back to (mainland) A shares,” Louis Tse, a Hong Kong-based director at VC Brokerage, said. “Investors anticipate more measures to support mainland shares. Realistically, it’s obvious that Hong Kong will lose out.”

U.S.-listed Chinese stocks ― including Alibaba and Baidu ― took a hit as the shockwaves of the rout in Shanghai reverberated globally.

However, on Wall Street the Dow added 0.55 percent, the S&P 500 jumped 0.62 percent and the Nasdaq rose 0.11 percent.

On currency markets the dollar fell to 121.56 yen against 122.55 yen, with the Japanese unit considered a safe bet.

The euro fell to $1.0996 from $1.1007 in New York, although it is up slightly from a five-week low of $1.0916 it touched in U.S. trade. The single currency was also at 133.85 yen against 134.89 yen.

In Europe, Greece moved closer to an exit from the eurozone after leaders ordered it to submit detailed bailout reform proposals by Thursday, while warning they had drawn up contingency plans in case it does not meet expectations.

All 28 European Union leaders will then examine the plans on Sunday in a make-or-break summit that will could save Greece’s moribund economy, or leave it to its fate.

“Tonight I have to say loud and clear ― the final deadline ends this week,” EU President Donald Tusk told a news conference.

“Inability to find an agreement may lead to bankruptcy of Greece and insolvency of its banking system,” he added.

European Commission President Jean-Claude Juncker warned “we have a Grexit scenario prepared in detail”, although he insisted he wanted Athens to stay.

The move turns the heat up on Greek Prime Minister Alexis Tsipras after the country voted Sunday against another round of painful austerity they say has crippled the economy.

On oil markets U.S. benchmark West Texas Intermediate for August delivery dropped 62 cents to $51.71 a barrel and Brent tumbled 80 cents to $56.05.

Gold fetched $1,150.50 compared with $1,165.74 late Tuesday.