China is tightening the screws on short selling to prop up its ailing stock market

• Policymakers in China are cracking down on lending shares to short a stock.
• New rules will ban big investors from lending shares during lock-up periods, per Bloomberg.

Officials in China will limit the ability of big investors to lend certain stocks for the purposes of short selling, adding to efforts undertaken by regulators to help stem a sell-off in the country's stock market this year.

Per Bloomberg, the new measures include banning so-called strategic investors from lending out shares during agreed lock-up periods, a practice that often adds pressure on markets during a prolonged slump.

The move aims to promote fairness and curb the advantages of some institutions, as well as provide all investors with extra time to analyze market information, the China Securities Regulatory Commission, said in a statement released Sunday.

It's the latest move by officials in Beijing to boost the market as the country's economic outlook deteriorates.

Last week, officials announced cuts to bank reserves requirements that would inject $140 billion into the banking system, which helped lift Chinese stocks from five-year lows early last week. Bloomberg also reported that the country is eyeing a $248 billion stock-market rescue. Experts told Business Insider that the move won't be enough to bring investors back to the country's financial markets.

China's gloomy economic outlook has led to a severe stock-market decline. Multiple factors, including a struggling post-pandemic recovery, a distressed real estate market, mounting debt, unprecedented youth unemployment, and the flight of foreign capital have weighed on the world's second-largest economy.