China stocks slide 4.3 pct but outperform region

(adds analysis, individual stocks)

* Index nearing September's 22-month low of 1,802 points

* Property shares outperform on local government steps

* China Union rises on rescue plan for PTA affiliate

By Claire Zhang

SHANGHAI (Reuters) - China's stock market fell sharply on Thursday in response to fears of a global recession and tumbles in equities prices around the world. But it outperformed other Asian markets on hopes for government support.

The Shanghai Composite Index .SSEC ended down 4.25 percent at 1,909.941 points, near the day's low of 1,901.503, in thin trade.

But the index outperformed the MSCI index of Asian stocks outside Japan .MIAPJ0000PUS, which was down nearly 8 percent.

Over the past 10 days, China has underperformed Asia during regional market rallies because of concern about slowing Chinese corporate profit growth.

But it has outperformed at times of regional weakness since many investors think Chinese authorities, who last month launched a market rescue plan which includes purchases of bank stocks by a government fund, do not want the index to fall sharply below the psychologically important level of 2,000 points.

Some investors are hoping for stronger government action to aid the market -- perhaps an expansion of buying by the government fund -- if the index nears a 22-month low of 1,802 points, hit on Sept. 18.

"The market is very fragile and vulnerable to movements in overseas markets. But the government may not want a freefall below 1,800 points, so some positive news might come at any time," said Li Wenhui, analyst at Huatai Securities.

Turnover in Shanghai A shares was small at 35.0 billion yuan ($5.1 billion) against 29.5 billion yuan on Wednesday. Losing Shanghai A shares outnumbered gainers by 861 to 73, with over 80 Shanghai A shares plunging their 10 percent daily limits.

PROPERTY OUTPERFORMS

Merchants Bank (600036.SS) lost 5.72 percent to 14.34 yuan. It estimated net profit for January to September rose more than 80 percent, but that would mark a slowdown from the first half, when profit jumped 116 percent.

Brokerages were hit hard with Hong Yuan Securities (000562.SZ) down its 10 percent limit to 13.44 yuan after estimating its third-quarter net profit shrank about 92 percent.