China's strict Covid-19 controls have weighed heavily on its economy since the onset of the pandemic. Now, a loosening of restrictions is raising hopes of a revival. Until recently, China had stood firm on its zero-Covid policy even as countries around the world adopt a "live with the virus" approach. But it has since relaxed its approach, with various cities announcing that commuters are no longer required to present test results to travel. Beijing has also begun removing testing booths within the city. Investors have cheered the relaxation of restrictions. China's CSI 300 index, which tracks the largest mainland-listed stocks, has risen 5.8% since China announced a reduction in the quarantine period for travelers on Nov. 10. Hong Kong's Hang Seng index is up 18.9% over the same period. And it's not just the reopening that is driving market optimism. China has, in recent months, announced a slew of measures in an effort to arrest the country's worst property slump in decades, raising hopes of a turnaround in the beleaguered sector. Wall Street is taking notice. Morgan Stanley turned bullish on China stocks for the first time in nearly two years, upgrading China to overweight versus emerging market stocks on Dec. 4 as the country embarks on a "clear path set towards reopening." UBS also sees a "stronger 2023" for China's economy. The bank said in a Dec. 15 note that while it expects economic activities to remain soft in the next couple of months, China should register economic growth of 4.9% for 2023, up from the bank's earlier forecast of 4.5%. 'Good long-term play' John Leiper, chief investment officer at Titan Asset Management, thinks now might be a good time for investors to snap up Chinese stocks. "The recent pivot on zero-Covid policy, catalyzed by recent protests , represents a meaningful shift that Beijing will struggle to reverse politically," Leiper told CNBC Pro. "Against this backdrop, valuations look cheap relative to history and to global peers. When we look at price, historically bear markets tend to last for around a year with an average decline of around 40%. This sell-off is longer in magnitude and duration than this average and when you look at the shorting ratio, from a contrarian sentiment perspective, this could be a good time to enter the market," he added. Leiper believes Chinese stocks represent a good long-term play given solid structural drivers, overly negative sentiment, and attractive valuations. The Chinese government is also willing and able to add support where required, he added. Meanwhile, Goldman Sach s estimates a full reopening could drive 20% upside for Chinese stocks . "If our estimates prove to be correct, the 'reopening benefit' could amount to US$2.6 trillion ... in equity market capitalization terms," Goldman's strategist Kinger Lau said in a note in November, ahead of China's relaxation of Covid-19 measures. HSBC is another major bank to turn upbeat on Chinese stocks, saying "after a tough year, things can only get better − and we believe they will." "In our view, the recent policy pivots to reduce Covid-19 restrictions and provide support for the property sector set the stage for a revival in China's equity markets. A more dovish tone by the U.S. Fed from early next year will also help. Market liquidity is already bottoming out and valuations are attractive after a grim 2022," HSBC Qianhai Head of Research Steven Sun wrote on Dec. 13. The bank said it favors high-quality growth sectors and remains overweight on industrials, consumer discretionary, consumer staples, and healthcare. It also expects large-cap stocks to "make a comeback" in 2023 due to improving global liquidity conditions and a better domestic economic environment. In a Dec. 14 note, Morgan Stanley said the market had not yet fully priced in the post-Covid-19 reopening. The bank added that it sees further upside via a strong earnings recovery into 2023. It recommends clients add exposure to offshore Chinese equities, as well as reopening beneficiaries, particularly names in the consumer discretionary sector. — CNBC's Michael Bloom contributed to this report.