"We do believe this is actually quite early in a secular bull cycle and we're going to see big new highs in the coming years," he said, adding that he sees the Shanghai Composite breaking above 10,000 "before this market cycle is over."
Fear of "Fine-Tuning"
The trigger for the recent pullback was fear that liquidity was being squeezed. After $1.1 trillion in new loans in the first half — a record surge — lending dropped sharply in July and the central bank said it would begin "fine-tuning" monetary policy.
China's benchmark index fell 20 percent from two weeks ago, after enjoying a world-beating 80 percent rally in the first seven months of the year. But the Shanghai Composite rebounded sharply Thursday, rising 4.5 percent — its second-largest gain for 2009, and closed 1.7 percent higher Friday.
China is still the emerging market darling in investors' eyes, with experts telling CNBC that it will be one of the best sources of growth in the next few years.
"The development of a nice growing economy in China, supported by other economies in Asia, is going to be very useful for the rest of the world," Stephen Perry, chairman of The 48 Group Club, told CNBC.
China's sudden increase in initial public offering activity (IPOs) is good news for foreigners, since when China outputs more and more of its economy into stock exchanges, there's an opportunity for the world to participate in its development, Perry said.
"Traditionally, there've been three drivers of growth in the Chinese economy," Tom Orlik, China analyst at Stone & McCarthy Research Associates, said. "We've had very high levels of fixed-asset investment, combined with a rapidly growing domestic consumption and finally a boost from net exports."
"What we're going to see in the second half of the year is the government hoping that those drivers of growth become more balanced," Orlik added.
A lot of growth has been coming from the public sector, with local governments spending money on roads, railways and airports, but what the government will want to see from now on will be the private sector stepping in with its own investment, he said
Orlik told CNBC the Chinese government is already beginning to decelerate its stimulus spending.
Tricky Getting In
When asked how investors can participate in China's 8 percent growth over the next few years, Perry said it is not simple: "Access to the Shanghai market is limited."