Four sources said on Friday that Chinese stock exchanges have imposed daily restrictions on the net selling activity of hedge funds and large retail investors, as Beijing intensifies support for the stock market amid the escalating trade war with the United States.

Two investor sources said the soft limit on the daily net selling of individual hedge funds and large retail investors - enacted through verbal warnings from brokerage firms - was set at 50 million yuan (6.83 million dollars).

Two brokerage sources said that failure to comply could result in trading accounts being suspended by the exchanges that issued the directives.

All four sources declined to be named as they were not authorized to speak to the media. The Shanghai and Shenzhen stock exchanges did not respond to Reuters' request for comment.

China has implemented a series of measures to stabilize its domestic stock market, which is reeling from an escalating trade war with the United States, where President Donald Trump has imposed sky-high tariffs on Chinese goods. These moves have largely shielded Chinese stocks from a global market sell-off.

On Friday, Beijing responded again and increased tariffs on imports from the United States to 125%.

China's Central Huijin state investment fund has committed to increasing its stock holdings, with more listed companies buying back shares and top Chinese brokerage firms pledging to stabilize the market amid rising tariffs and global recession risks.

One of the brokerage sources said: 'Such restrictions are understandable because you don't want to act against the wishes of the state.'

According to an announcement made late Thursday and reviewed by Reuters, brokerage firms have been asked to closely monitor the trading of private funds and large retail clients.

The announcement stated that the current daily net sell limit of 50 million yuan for investors could be further lowered if the market continues to decline.

Chinese and Hong Kong stocks reversed their decline at the start of Friday's trading and narrowed weekly losses.

Earlier this week, Trump temporarily suspended the implementation of 'reciprocal' tariffs on most other countries but imposed tougher tariffs on China.

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