Chinese stocks sank more than 5 percent on Monday to a fresh 2013 low as investors concluded the government would not take any steps to boost the market.

The central bank issued a statement in the day, saying that the credit market is not facing an imminent crisis and banks should improve their liquidity management.

The statement from the People's Bank of China was taken by many analysts as a clear signal that the government had no plans to intervene in the market. Analysts said some investors took the statement as a sign to cut their losses, while others simply stayed on the sidelines.