China's main stock index posted gains on Wednesday after plunging by about 10 percent following three straight days of losses.

At the end of Wednesday's trading session, the Shanghai Composite Index and the Shenzhen Composite Index increased by 3.4 percent and 4.1 percent to 3789.16 and 2198.81 points respectively.

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Experts say it is likely that the sudden gains are being spurred by the government's purchase of shares.

After the Shanghai Composite Index and the Shenzhen Composite Index experienced their biggest losses in nearly a decade on Monday, Chinese regulators vowed to continue to support the market by purchasing shares.

China Securities Regulatory Commission (CSRC) also vowed to investigate concerns that the market plunge was precipitated by investors who engaged in illegal short selling.

If indeed the actions of the Chinese government have once again revived the stock market, it has multiple implications for China.

Analysts say investors may have been lured to buy shares in the final hour of trading in China's stock market on Wednesday because they discerned that the government's support is still present.

Zeng Xianzhao from Nuoding Asset Management told the Wall Street Journal that investors' confidence is delicate presently. "That's why people say confidence is more precious than gold," he explained.

While China's intervention to stabilize the country's vacillating stock market is justified by the effects it has produced, critics have questioned the "drastic measures."

An inside source recently told Bloomberg that the International Monetary Fund (IMF) has asked China to ease its intervention in the market and allow market forces settle prices. According to the insider, Chinese authorities have assured the IMF that the market intervention is only temporary.

Critics say the state's hand in the country's financial market could be a major impediment to the inclusion of the yuan in the IMF's basket of currencies with Special Drawing Rights. One of the IMF's key requirements for granting Special Drawing Rights to any currency is that it is "freely usable."

However, the IMF has not specifically highlighted this as an impediment to adding the yuan in its basket. Currently, several foreign central banks hold hundreds of billions of yuan in reserve.  Chinese authorities have vowed to carry out reforms to ease limitations on the country's economy according to the IMF's requirement.

TagsChina Stock Market News, chinese shares, Shanghai Composite Index, Shenzhen Composite Index, China stock index, Chinese Shares Bounce Back, China stock market