In 2015, when a spectacular A shares market rally ended in tears, China's economy was "doing badly relative to other economies," Mr. Taylor added. This year it could prove to be the one economy that manages to return to pre-COVID-19 levels, he said.
And with the earnings of Chinese companies linked more closely to economic growth than those of U.S. companies, which proved capable of delivering stellar earnings growth in an economy growing by 2% or so a year, the outlook for firms listed in Shanghai and Shenzhen are looking considerably better now, he said.
A 25% rally since May has only seen valuations on mainland China coming back from very low levels to 10-year market averages, so "we're looking still at reasonable valuations," said Ben Sheehan, a Hong Kong-based senior equity investment specialist, Asia-Pacific, with Aberdeen Standard Investments.
Meanwhile, some investors predict the relative success China has enjoyed in containing the coronavirus could fuel further A shares gains later this year.
China has "crushed" the COVID-19 threat and its market would be doing even better if the decisive monetary and fiscal policy support provided by U.S. policymakers wasn't keeping global investment flows focused on U.S. markets for now, said Paul Sandhu, BNP Paribas Asset Management's Hong Kong-based head of multiassets quant solutions and client advisory for APAC.
But at some point, if the U.S. doesn't begin having more success in getting its coronavirus crisis under control, some of that money in U.S. markets could begin to find its way to China, Mr. Sandhu predicted.
"In an environment where growth is becoming more scarce and China is on a solid post-COVID recovery path, it shouldn't be surprising that Chinese equities are having their day in the sun," said William Chuang, Hong Kong-based portfolio manager, Asia equities, with AXA Investment Managers.
But if powerful rallies by the mainland's retail-dominated markets have proven hard to sustain in the past, market participants see prospects for a healthier bull market this time.
AXA's Mr. Chuang said he "can sense the nervousness in the market" as a result of July's strong start; but for almost every metric, including closely watched margin lending balances, the A shares market remains well short of past highs.
"We expect that the markets can still rally, although more mildly from here," said Eng Teck Tan, a Singapore-based senior portfolio manager with Nikko Asset Management Asia Ltd., adding "there are no signs of a bubble yet."