Bloomberg News.
"The process will be very long. They do not need to rush to sell their positions in the short term."
Other negative factors are out of the control of securities regulators: an expected US interest rate hike affecting global activity and China´s own slowing growth -- the economy expanded 7.0 percent in the second quarter, a far cry from double-digit increases of the past.
But exactly where the bottom might be, nobody knows.
Gu Luxian, a former bank employee who trades stocks full-time after leaving his job, plans to return to the market after it falls at least another 20 percent.
"I´ll wait until the market slumps to 2,800 points to buy stocks again. Everybody is leaving the market, so why stay?" he told AFP.
But Japan´s Nomura believes the plunge represents a buying opportunity and urges its clients to selectively pick up stocks.
"Market consolidation may continue until the interim results season in mid-August upon more positive micro-level and macro-level data," Nomura said in a research report.
"We suggest investors take advantage of this likely second bottom to buy stocks with structurally sound fundamentals."
Regardless, volatile trading will reign and could impact the world´s second largest economy as a slowdown in financial activity cuts into growth.
"The stock market will continue to be very volatile despite the high-profile rescue package," ANZ Banking Group said in a research report. "The stock market volatility does present some downside risks to China´s growth outlook.
US analyst Tom DeMark, founder of DeMARK Analytics, told Bloomberg News that behaviour in the Chinese stock market mirrored the 1929 Wall Street Crash, which helped trigger America´s economic "Great Depression".
He expects the Chinese market to fall to 3,200 in the next three weeks and says government measures to stem the slide are futile. "You just cannot manipulate the market. Fundamentals dictate markets," he said.