Lack of China understanding exacerbated slide: Experts

A lack of understanding of Chinese markets likely exacerbated this week's turbulence, according to UBS Wealth Management and JPMorgan.

A move by China's central bank to guide the yuan sharply lower, coupled with the introduction and subsequent scrapping of circuit breakers that halted trading twice this week, rocked global financial markets from Tokyo to New York this week.

The moves revived concerns about the economy while leaving many participants confused about policymakers' intentions. However, some experts say investors must share the blame as well.

"If I were to be harsh about it, I'd say markets do not want to understand the Chinese market," said Kelvin Tay, southern Asia-Pacific managing director and regional chief investment officer at UBS Wealth Management.

Men look an electronic board showing stock information at a brokerage house in Beijing, China, January 5, 2016.
Kim Kyung-Hoon | Reuters
Men look an electronic board showing stock information at a brokerage house in Beijing, China, January 5, 2016.

Tay argued that the Chinese have been transparent about their currency reforms.

"They've already said they're changing the way they are managing the currency, and [announced] what the components are in the trade-weighted currency basket," Tay said in a CNBC "Street Signs Asia" interview.

The euro, which is has the second largest weighting in the trade-weighted yuan index, has weakened 2.9 percent against the U.S. dollar since last October on expectations of further European Central Bank easing.

If the euro weakens, the yuan, which is following the new index should weaken as well, and this should not have people jumping to conclusions that China is engaging in a currency war, Tay added.

However, Tay said that China needs to make improvements to the way it communicates with markets, averting the need for traders to second-guess.

"It's just the way that [China] has managed its disclosure that has upset markets," Tay said.

A potential silver lining from the market's turbulence is the growing recognition that "China is important, people need to focus a lot more on the market and better understand the fundamentals of the market or we will have continued sell-offs and panic selling like this," Jing Ulrich, Asia-Pacific managing director and vice chairman at JPMorgan, told "Asia Squawk Box".

"The need for investor education across China and across the world is critically important," added Ulrich.

Follow CNBC International on Twitter and Facebook.