The Chinese government is preparing to buy shares of stock to stabilize their markets after a plunge of more than 8 percent on Monday that impacted markets across the world.

The government also threatened to “deal severely” with anyone who is found to be engaging in “malicious shorting of stocks” in the government’s opinion.

The two Chinese markets, the CSI300 and the SSEC lost 8.6% and 8.5% respectively.  Only 13 of the 1,114 stocks on the Shanghai Composite were up after Monday.

“Because of the high, still high leverage exposure of the Chinese markets, anything that triggers a decline in such a short time will see some negative spiral effects in such highly leveraged markets,” Raymond Yeung, senior economist of Greater China at the Australia and New Zealand Banking Group, told VOA.

The Chinese market collapse caused the Dow Industrial Average to fall 150 points at the opening Monday.

“The fear factor of China is very much alive in the market. That’s nearing us to some technical support levels,” said Peter Cardillo, chief market economist at Rockwell Global Capital told CNBC. “Slow growth out of China just complicates the oil picture.”

The Chinese market caused oil to fall below $48 a barrel.

One Chinese market expert says the government should allow the market to correct as Chinese stocks are overpriced.

“The valuation of Chinese [stock] markets remains over-priced, which creates rooms for further downward revisions. The government’s rescue measures could curb the slides in a short term, but are powerless in reversing the long-term trend,” Lu Suiqi, associate professor of economics at Peking University says.