China shares fell the most in three weeks on Tuesday, as a gloomy economic outlook weighed on consumer and cyclical stocks, while fresh regulatory tightening hit tech plays.

The blue-chip CSI300 index dropped 2.1% to 4,837.40, while the Shanghai Composite Index lost 2% to 3,446.98 points. Both indexes had their worst day since July 27.

Sharp deceleration in China's factory output and retail sales in July dented confidence.

China stocks fall on weak economic data; tech shares drag Hong Kong index

"We expect growth to slow further in the next few months," said Zhiwei Zhang, Chief Economist of Pinpoint Asset Management.

"A big question is whether the government will change its plan on fiscal spending and move the schedule forward."

There are no signs of a relaxation in monetary policies, as China's central bank kept rates unchanged for medium-term loans on Monday.

"As long as the prudent monetary policy stance remains unchanged, the MLF rate will not be easily adjusted," said Wang Yifeng, senior analyst at Everbright Securities.

Further reducing risk appetite, China moved to tighten control of its technology sector, publishing detailed rules on Tuesday aimed at tackling unfair competition and companies' handling of critical data.

China's tech-heavy STAR 50 Index plunged 2.5%, while the CSI IT Index slumped 3.1%. The semiconductor index, the target of intensive buying recently, tumbled 4.3%.

The healthcare sub-index plunged 3.8% and consumer staples sub-index slumped 3.9% amid concerns a weak economy would crimp spending.

The property sector is one of the few bright spots, with an index tracking the sector rising 1.8%.

Several cities announced rules to cap the land price premium during auctions at 15%, potentially improving developers' margins.

"Stabilizing the cost of land purchases and housing prices would ease developers' worries that their profit might go to zero," CITIC Securities said in a note.