A report released by CITIC Securities on Thursday noted: "We remain cautiously optimistic about the market in 2014. On the one hand, growth rates are declining for short-term economic growth and companies' profits, partly because of pain brought about by reform. Potential risks remain in credit. Liquidity and interest rates will become the key elements that suppress valuations," said.

"On the other hand, as the leadership gave a clear direction and target for economic growth in 2014, and capacity reduction tapering with the start of a new economic cycle, downward room will be limited for China's A-share market."

Outside China, emerging markets are experiencing strong turbulence with benchmark stock indexes sinking to a five-month low and nations' currencies tumbling.

By Friday, the MSCI Emerging Markets Index had dropped 11 percent from an Oct 22 high and is valued near its biggest discount in five years versus the MSCI World Index of advanced-country shares, according to Bloomberg.

Analysts said the turbulence is far from ending.

The tide is receding in emerging markets. The prospect of the end of cheap money in the West, with the certainty of the end of even cheaper money in China, is forcing up the cost of capital across the EM (emerging market) asset class, said Dominic Rossi, global chief investment officer of equities at Fidelity Worldwide Investment.

"We have seen this movie before. One EM country after another gets left stranded on the shore as the tide goes out. The weakest ones first - Argentina and Turkey - soon to be followed by Brazil, Russia and others, " he added.