Shares in a2 Milk - the market's biggest stock - slumped by more than 10 per cent after China said it planned to lift self sufficiency in infant formula manufacturing to 60 per cent from 40 per cent at present.

By the close of trading the stock was down by 11 per cent or $1.75 at $14.05 - its lowest point since late March.

A report in the China Daily said domestic companies were to be encouraged to develop new products for market.

The paper quoted a report from seven central government departments including the National Development and Reform Commission