Zhang Jun, a 40-year-old real estate researcher, vowed to never again trade Chinese stocks after losing thousands ofyuan during the market crash of 2008. Now he’s jumping back in.

“This time, it’s different,” he said at a crowded China Galaxy Securities Co. outlet in Beijing’s Xicheng district.

President Xi Jinping supports rising share prices, while the market has “matured” after losses during the past five years erased more value from the ShanghaiComposite Index than any other global equity gauge, according to Zhang.

“If Xi wants to realize the Chinese dream, he has to boost the stock market, which makes us ordinary people happy,” Zhang, who plans to make an initial purchase of about 100,000 yuan ($16,153) and is considering using borrowed money to amplify his wagers, said in an interview on Dec. 9. He said he wouldn’t be surprised if the benchmark index jumps to 10,000, or 231 percent above yesterday’s close.

Individuals are returning to China’s $4.9 trillion stock market at the fastest pace in seven years, fueling a world-beating rally that’s sent share prices to the highest levels since 2010. Interviews with Zhang and three other retail investors in Beijing and Shanghai show a growing willingness to look past previous bear markets as the nation’s central bank steps up efforts to support the economy and returns from alternative investments such as real estate decline.

David Fuller's view

China also runs a dictatorial form of government but power is much more diversified than within Russia today.  More importantly, China also manages a capitalistic economy, albeit of the command rather than democratic variety.  Entrepreneurial talents are increasingly allowed to flourish, as we see with Jack Ma of Alibaba. 

The main lesson I have learned from China’s command economy, is that regardless of what most western analysts and strategists think, and their views are all over the place, to benefit from the stock market we really need to pay attention to what the government is saying, and run with the price action. 

Today, China’s Shanghai A-Shares Index is temporarily overbought at a time when most other stock markets have rallied strongly over the last two days having been oversold, as I pointed out in yesterday’s review.  However, China is still cheap, especially the demonstration-affected Hang Seng Index, which outperformed the A-Shares today for the first time in a number of weeks.  Note: you do not see this on the weekly 10-year charts which I provide for overall perspective but you would see it on the daily charts.