Chinese equities still the best performers in Asia, experts say

"There is a balance point between reform and growth that the Chinese leadership is trying to find," said Seth. "The growth rate in China might be lower than where we are today. But the country has resources to manage the economy. There will be some defaults in the property sector, but that isn't necessarily going to derail the economy. When it comes to investing, slower growth is not necessarily bad. It's about picking the right names and the right sectors."

With signs of stabilization starting to emerge, China Construction Bank International foresees the country's economic growth to remain firm in the second half at around 7.4 percent year-on-year.

"The hard landing concern is groundless. We expect growth to be stable over the whole year," said Eliza Liu, deputy head of research and chief economist of the Hong Kong-based CCBI Securities. Government-initiated investment in infrastructure will accelerate in the second half, while increased liquidity will lower borrowing costs and boost bank loan growth, she said, adding that the widening trade surplus will offset the negative impact of the slowdown in property sector.

Liu expects China's monetary and fiscal policies will remain loose in the second half also, and expects a further reserve requirement ratio cut by 50 basis points or interest rate cut by 25 basis points.

The People's Bank of China announced a series of mini-stimulus measures since April to lower the RRR of some financial institutions, in order to fasten investment in rural areas and towards the small and medium-sized enterprises sector.

On June 16, the central bank decided to lower RRR by 50 basis points for commercial banks which are focused on rural lending and loan disbursements for micro and small companies. Finance companies, financial leasing companies and auto financing companies also received RRR cuts of 50 bps. The mini-stimulus is expected to have covered two-thirds of the city commercial banks, including Industrial Bank Co Ltd, China Minsheng Bank Co Ltd, China Merchants Bank Co Ltd and Bank of Ningbo Co Ltd.

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