The entire world’s economy has been shaken over fears concerning the stability of China’s market.

On Monday, China's benchmark Shanghai Composite index declined 8.5 percent, the worst close the communist country has had since 2007. As a result of this crash, every Asian market has suffered major losses, which also affected the U.S. European markets.

In the U.S., the Dow Jones Industrial average dropped more than 1,000 points. As the BBC reported, London's FTSE 100 index was down by nearly 5 percent in the afternoon trade. Markets in France were down by 6.8 percent and Germany was down by 5.6 percent.

Fears over China’s economic instability had been mounting recently, as China's central bank devalued the yuan, China’s currency, two weeks ago. Patrick Chovanec, managing director at Silvercrest Asset Management, spoke last month of the dangerous situation approaching China, blaming a potential collapse on overestimation and a disconnect with their economic reality. As quoted in CNN, Chovanec said, "China's stock market had become detached from the reality of China's own economy, and appallingly overvalued."

As a result of Monday’s accelerated selloff in Chinese stocks, Beijing has made plans to flood its banking system with new liquidity in an effort to offset the effects of its currency devaluation. As reported by the Wall Street Journal, the strategy is expected to free up more funds for lending and thereby counter the effects of the weakened yuan.

Eswar Prasad, the former China head for the International Monetary Fund, has summed up the mood of worldwide anxiety, stating, “Views about China’s economic prospects appear to be shifting from serious concern to near panic.”

According to the New York Times, Dan Greenhaus, the chief global strategist at the BTIG investment firm, spoke to the climate of the traders, who had hoped that the Chinese government would have announced steps to support the markets before Monday, saying, “There was a huge amount of negative sentiment built in this morning.” 

As of early Monday afternoon, the Dow Jones regained some its of losses, down only 278.90 points, or 1.69 percent. By noon, the Dow Jones averaged 16,180.95 points, an increase from Monday's low of 15,350.33 points.