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China's bubble popping not over yet: Strategist

July marked another painful month for Chinese stocks, with the country's Shanghai Composite Index slipping about 15 percent to post its worst monthly loss in six years.

Despite renewed state intervention to calm China's markets, slowing growth has investors, including Safanad's chief investment strategist, John Rutledge, projecting an even bigger selloff.

"They have thrown everything but the kitchen sink trying to stop this market from falling," he told CNBC's "Power Lunch" in an interview Friday. "But, of course, bubbles don't half pop, this thing is not over yet."

Amid the selloff, Beijing moved to freeze shares of some companies, put off IPOs, and encouraged state-owned companies to buy more blue chip stocks. Discouraging the sale of shares banks may not want to hold leaves them in a rather precarious position, according to Rutledge.

"These institutions have loaded up on shares whose prices are likely to fall further," he said. "I don't think Chinese financial stocks are a very good bet at all right now."