Analysts predict that a new set of rules will be implemented by the government as a result of last week's stock market volatility and other related problems, China Daily reported.
Such measures, which include monetary easing, would help stabilize the foreign exchange market and, as a result, help investors ease their worries.
Last week's stock market-related problems included the suspension of the new circuit-breaker mechanism on Thursday, Jan. 7, due to the poor performance in key indices just four days after its launch.
As a result, Shanghai Composite Index declined about 10 percent for the first week of 2016.
The market selloff which began early last week also concluded on Friday. The selloff was the product of expectations among investors that large shareholders from index-linked companies will sell shares as soon as the six-month ban was lifted.
According to analysts, the circuit breaker, which was meant to decrease market movement to help resolve volatility, exacerbated the selloff and also aggravated liquidity crunch.
Investors in the A-share market, on the other hand, are advised to lay off investing for a while and focus on other ventures that are opening up this year.
Chief China strategist Wendy Liu from Nomura Securities predicts that China's credit cycle as well as the U.S. Federal Reserve's rate hikes are two major forces that will influence the Chinese market this 2016.
Liu said, however, that market conditions might improve come March.
"In China, its credit cycle will further unfold, as a key part of the supply-side reforms, which will likely lead to a rising bank non-performing loans, various credit defaults and closure of 'zombie' companies, including some state-owned enterprises," said Liu in an interview with China Daily. "While this may raise risk aversion, it is the very reform that the market has been waiting for."
The Chinese currency reached its lowest level since 2011 last week, fueling more fears of a destabilized and fragile stock market.