Aug 17 (Reuters) - More regulation from Beijing and a general risk-off mood amid fears over slowing economic growth saw emerging markets stocks suffer a 1.2% decline to hit three-week lows. Mainland China stocks lost 2% and Hong Kong shares extended losses to a fourth straight session after Chinese regulators on Tuesday issued a lengthy set of draft regulations for the internet sector, banning unfair competition and restricting the use of user data. This followed a series of crackdowns that so far have hit the technology, education property and insurance sectors. Internet giant Alibaba and Tencent lost more than 4% each, while Netease eased 5.4%. An index of EM tech shares slid to three-month lows, down 0.9% The broader EM equities index extended losses to a fifth straight session as economic growth worries were exacerbated by dismal factory output and retail sales data from China, a major trading partner for most EM economies. “The overriding theme was caution with markets unable to shake off nerves about the COVID-19 Delta variant and its effects on the admittedly K-shaped global recovery after recent data disappointments from the U.S. and China,” Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA. But a strong recovery in Malaysian stocks, a day after the prime minister resigned, and gains for South African , Russian and most central and eastern European shares helped cap losses. Pakistan’s 236 eurobonds rose after declining to nine-month lows on Monday amid fears of a knock-on effect from the Taliban’s takeover of the Afghan capital Kabul. Zambia bonds nudged higher to extend gains after opposition leader Hakainde Hichilema’s presidential election victory. EM currencies slid 0.2% to the lowest since late July. “The tenuous backdrop for China makes the outlook for EM FX overall more fragile,” said strategists at JPMorgan. “EM FX forecasts are also modestly downgraded in keeping with the change in CNY targets to 6.50 from 6.45.” South Korea’ won led losses among Asian currencies, while South Africa’s rand weakened 0.3% to its lowest in three weeks. JPM said a recent change of finance minister probably signals higher fiscal risks. Given the moderate inflation backdrop, it does not expect South Africa’s central bank to follow several other EM central banks that have started a hiking cycle to stave off inflation. For GRAPHIC on emerging market FX performance in 2021, see tmsnrt.rs/2egbfVh For GRAPHIC on MSCI emerging index performance in 2021, see tmsnrt.rs/2OusNdX For TOP NEWS across emerging markets For CENTRAL EUROPE market report, see For TURKISH market report, see For RUSSIAN market report, see Reporting by Susan Mathew in Bengaluru; Editing by Timothy Heritage Our Standards: The Thomson Reuters Trust Principles.