"I'm feeling less bad about China," Ajay Kapur, head of Asia-Pacific and emerging markets strategy, Bank of America Merrill Lynch, told CNBC Asia's "Squawk Box." "If you look at the data it has surprised positively and I think economists will start to revise their growth forecasts higher."
In fact, some banks have done so already; Goldman Sachs recently raised its full-year estimate for China's gross domestic product to 7.6 percent from 7.4 percent.
(Read more: Goldman upgrades China growth, cuts India outlook)
While there were concerns about the risks facing China's banking system, analysts said these worries were largely priced into the stock market.
(Read more: China PMIs impress but analysts warn of risks ahead)
"In China, they are taking action before a crisis occurs and that sets the path for a bull market in Chinese equities from a very low level of valuation," Kerry Series, founder and CIO at Eight Investment Partners, told CNBC, referring to the problems in the banking sector.
The Shanghai Composite is trading at a price-to-earnings ratio of about 10.2 compared with Japan's Nikkei, which is trading at almost 20 times, and the Australian stock market's 16.8.
"China is not out of the woods yet, but we are seeing enough certainty from the data, enough certainty from the global economy that investors are starting to buy cheap valuations," said IG's Weston.
—By CNBC.Com's Dhara Ranasinghe; Follow her on Twitter @DharaCNBC