The crackdown also represented a “paradox” with some of the government’s other goals, Prasad noted.

“On the one hand, the Chinese government, I suspect, still wants the right sort of corporate outflows. It loves technology transfers from the rest of the world and the acquiring of managerial and other sorts of technical expertise,” he said. “But I think right now, the prerogative of trying to manage the capital outflows is taking precedence.”

Prasad also pointed to concerns about corporate China’s growing debt pile.

In a note on Monday, Nomura estimated that China’s outstanding non-financial sector debt hit 191.3 trillion yuan ($27.96 trillion), or 251 percent of gross domestic product (GDP) in the first quarter, up from 158.3 trillion yuan, or 231 percent of GDP, at the end of 2015.

“Some of these companies have not only been using domestic leverage, but also trying to increase their profile abroad,” Prasad said, noting authorities’ concerns over rising domestic debt.

“I think the notion of some of these companies becoming too big for their britches and also adding to both domestic risks of their leverage build up and capital outflows may all be leading to a confluence of issues that led to this crackdown,” he said.

In a recent paper, the IMF said that corporate credit growth in China has been “excessive.” But “investment efficiency has fallen, and the financial performance of corporates has deteriorated steadily, affecting asset quality in financial institutions,” IMF researchers wrote.

—CNBC’s Sophia Yan contributed to this article.

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