I can think of at least three basic reasons to be bullish on China: First, the collapse of crude oil prices will boost consumers' real incomes, helping them play a larger role in the economy.

Second, even though property prices have recently stalled and begun to fall, China will probably avoid a serious credit crunch, partly because Chinese policy makers have been more serious about restraining prices before they can collapse. Moreover, the price decline has made real estate affordable for more Chinese.

A third reason to be optimistic is the subdued nature of inflation in China. This allows for more accommodative monetary policy going forward.

Taken together, these factors will make it easier for China to rebalance its economy -- by raising wages, increasing property-ownership rights for urban migrants and reforming pension systems.

In 2016, when China -- with its economy growing at 6 to 7 percent -- chairs the Group of 20 nations, it can do so as a fully engaged member of the global economy. 

David Fuller's view

All of this makes sense to me.  China has curbed its property speculation, slightly reduced corruption, and targeted its stock market for an impressive return prior to its chairing of the G-20 Summit in 2016.  China’s valuations remain competitive.

The Hong Kong Hang Seng Index (p/e 10.03, yield 3.80) according to Bloomberg led China’s recovery until it was sidetracked by political freedom demonstrations.  It would have to close beneath 22,450 to delay significantly an additional recovery.  The long underperforming Shanghai A-Shares Index (p/e 16.17, yield 1.96%) has been all but bullet proof since November.  This is likely to spill over into a medium-term consolidation before long, but I see no evidence that it will be a replay of 2009 because this time the property market is under control.  The financially weighted Hang Seng China Enterprises Index (p/e 8.43, yield 3.60%) is challenging previous highs near 12,000 and has more underlying support this time.