As a matter of fact, some say the major sell-off has provided a strategic opportunity for investors to buy more.

"Many analysts will suggest you that China has entered the period of a structural bullish market, and as it is," said Xu. "What investors should do is to stay calm and find out what they need from the risky but profitable stock market."

China has been working to develop a more transparent and fair stock market, but problems still exist.

This year, the government vowed to make the stock market more reliable and transparent. Fang Xinghai, former deputy chief executive of the Shanghai Stock Exchange, stated that the best way to ensure the smooth functioning of China's stock market is to establish a self-adjusting mechanism. Fang said the country will continue to strengthen its institutional investor base, introducing short-selling and stock index futures, loosening government control of IPOs and expanding China's Qualified Domestic Institutional Investor program. Strengthening its markets and maximizing their transparency and accountability will provide China with a potent engine of greater growth.

The real culprit

Right after the Black Tuesday scenario took place, some foreign politicians accused China of causing major market turmoil.

However, after the world media calmed down, they reached a consensus that the Japanese yen interest rate hike was probably the real culprit. "The unwinding of the so-called Japanese yen carrier trade has wreaked havoc in global markets," as The Wall Street Journal reported.

Last July, Bank of Japan, the Japanese central bank, ended its unusual five-year policy of keeping interest rates at zero. In January, Bank of Japan lifted the benchmark interest rate up again by a quarter of a percentage point to 0.5 percent. Investors have long enjoyed borrowing cheaply from Japan and investing the funds in markets with higher returns such as the United States, Europe and elsewhere in Asia. Though the mild interest rate adjustment won't hurt traders' enthusiasm, it had stirred the international stock markets. The expectation of further interest rate lifts has made investors much more uneasy.

The real powerhouse of the world economy is still developed countries like the United States, Japan and European Union. As a Chinese saying goes, "If the U.S. economy starts to cough, then the whole world will catch a cold."