Jon Carnes is about the last person on Earth you’d expect to turn bullish on China’s stock market.

This is a man who built his career on wagers against Chinese companies, bets so successful that one analyst ranks the 41-year-old among the best short sellers worldwide -- more effective than industry giants from Carson Block to David Einhorn. Carnes’s bearish research caused such a stir in 2011 that he fled China and had to fight off fraud allegations. The ordeal landed one of his colleagues in a Henan province prison.

So when Carnes says he’s now an advocate of investment in China Inc. -- with a 111 percent rally forecast for the Shanghai Composite Index -- it’s worth paying attention. His optimism is all the more striking given it comes at a time when many international money managers are turning bearish, put off by what they see as bubbly valuations and unjustified government intervention to prop up share prices after a $4 trillion rout.

For Carnes, the bull case is simple. The stock market’s surge to a seven-year high in June caught most Chinese investors by surprise, and they’re determined not to miss the next buying opportunity. In a country where household wealth surged to an estimated $21 trillion last year, less than 10 percent of the population is invested in equities.

“A lot of people missed out on the bull market,” Carnes said by phone from his office in Vancouver. “This violent correction is a huge buying opportunity for them.”

David Fuller's view

The short-term bull point for China is the amount of liquidity that the government may be willing to deploy in an effort to lift its stock market, for which Shanghai A-Shares are the most important Index.  Inevitably, that will be controversial, not least as many people will question the use of considerable reserves for this purpose.  Would it be to save face, increase confidence and buy investor loyalty?  Probably, but this form of Chinese style QE may not be the best policy for GDP growth.