Mainland China markets are languishing in bear market territory as investor concerns over an ongoing trade dispute between Washington and Beijing and a slowing economy weigh on sentiment.

The benchmark closed officially in bear market — referring to a decline of at least 20 percent from recent highs — on Tuesday. The smaller Shenzhen composite moved into bear market territory in February this year. The Shanghai and Shenzhen composites were down around 22 percent and 26 percent, respectively, from their 52-week highs, as of Asia afternoon trade on Wednesday.

Among the factors weighing on the market is the elevation in trade tensions between the U.S. and China, the world's two largest economies, in recent months.

In the days ahead, markets are awaiting potential announcements on the Trump administration's plan to curb Chinese investments in U.S. technology, although messaging on those measures from the White House has proven conflicting. The U.S. is also set to impose an additional 25 percent tariff on $34 billion in Chinese imports on July 6, with duties on a further $16 billion in Chinese goods in the works.

Although the macroeconomic impact of those tariffs is seen as marginal, the trade measures could likely have a substantial knock-on effect given the complicated nature of global supply chains.

"If you only focus on the $50 billion tariff, the macro-impact is still very limited ... The more worrisome news is more on the non-tariff parts, which is on investment restriction, and that could lead to a disruption in the global production line and also global trade," Haibin Zhu, chief China economist at J.P. Morgan, told CNBC's "The Rundown."

"If you put them together, clearly the market is becoming much more nervous and the nervousness is more severe in the onshore investor compared to the global investor."