But late in the day, the Shanghai Composite index erased its early losses to end up only 0.5 points at 2,603.80.
Another factor weighing on companies whose stocks have sunk is what many see as the potential damage from a prolonged US trade war with China, either because of retaliatory tariffs imposed by Beijing or because of weakening Chinese demand.
Stocks fell Friday as a technology sell-off rattled global markets.
Asian stock markets opened in the red on Thursday, a day after technology stocks hit Wall Street with the largest daily decline since 2011 and wiped out all of this year's gains.
The Dow Jones Industrial Average fell 296.24 points, or 1.19 per cent, to 24,688.31, the S&P 500 lost 46.88 points, or 1.73 per cent, to 2,658.69 the Nasdaq Composite dropped 151.12 points, or 2.07 per cent, to 7,167.21. It's also the middle of corporate earnings season - a time when publicly traded companies must tell the world how they're doing - and some companies are forecasting slower demand, making some shareholders wary.
Toyota Motor Corp. gave up 2.7 per cent while Hong Kong-based retail supply chain giant Li & Fung Ltd. lost 1.3 per cent.
While U.S. economic growth kept apace despite trade wars, the same can not be said of U.S. corporate profit growth, as a slew of disappointing forecasts this earnings season showed how tariffs, rising wages and borrowing costs as well as jitters over geopolitical events are hurting companies.
Google-parent Alphabet Inc sank 3.3 percent after its revenue missed estimates, fanning concerns that investments in new businesses, rising regulatory scrutiny and competition are producing slow returns.More news: Browns fire head coach Hue Jackson
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Declining issues outnumbered advancers for a 5.14-to-1 ratio on the NYSE and a 3.38-to-1 ratio on the Nasdaq.
Banks, health care and industrial companies also took heavy losses, outweighing gains by utilities and other high-dividend stocks.
The Russell 2000 index of smaller-company stocks gave up 57.89 points, or 3.8 percent, to 1,468.70, and is down 4.4 percent for the year.
High-flying companies like Netflix and Amazon took some of the biggest losses Wednesday.
ENERGY: Benchmark U.S. crude fell 66 cents to $66.67 a barrel in electronic trading on the New York Mercantile Exchange. Bond prices rose, sending yields lower, as investors seek less risky assets. UPS fell 3 percent. The Dow Jones lost nearly 300 points (about 296 points) or around 1.19% to end the day with the bear dogging their heels.
Investors moved to the relative safety of United States government bonds, which move inversely to yields, with the 10-year falling 4.7 basis points to 3.089%, its lowest in three weeks.
Boeing was one of the few gainers Wednesday. National Oilwell Varco lost 7.8 per cent to $34.12.
The dollar weakened to 112.44 yen from 112.47 yen on Tuesday. The euro fell to $1.1362 from $1.1387.