Chinese stocks recovered from sharp losses after a roller-coaster ride Wednesday. The benchmark Shanghai Composite Index had dropped 4%, before settling at 3,160.17, 0.2% down from the previous close.

This comes amid reports Beijing has been buying shares over the past few days to prop up the market. "But investors have lost confidence... the correction isn't over yet," Wu Kan, a Shanghai-based fund manager at JK Life Insurance, told Agence France Presse.

Chinese shares had been on a wild swing following Tuesday's release of two surveys indicating the country's mammoth manufacturing sector was shrinking at its fastest pace in three years.

The official manufacturing purchasing managers' index (PMI) dropped 49.7 in August from 50 in July. Likewise, the final Caixin/Markit manufacturing purchasing managers' index recorded a drop in factory activity. It came in at 47.3 in August, down from 47.8 in July.

"The data is hardly new. China's economic data have been weak for a long time," Pruksa Iamthongthong, investment manager at Aberdeen Asset Management, told CNBC. "We do see a fair bit of bloodbath in other sectors and across the market."

Chinese markets are closed on Thursday and Friday for the national commemoration of the end of World War II.

Other markets in Asia were also up Wednesday, with Japan's benchmark Nikkei 225 index closing up 0.4% to 18,095.40. On Tuesday, it shed 4%, leading losses in the region.

Australia's S&P/ASX 200 ended 5,101.50, 0.1% higher from the previous close, despite disappointing economic data. The country's gross domestic product (GDP) in the second quarter expanded 0.2% from the previous quarter, below economists' expectations of 0.4%.

In South Korea, the benchmark Kospi index closed 0.05% higher at 1,915.22, despite government data showing a 4.3% drop in July exports.

In Wall Street, it was a rough Tuesday for US stocks. Major averages fell nearly 3% after data showed US factory activity in August hit a more than two-year low, giving the Federal Reserve one less reason to raise interest rates this month.