Some of the world’s largest investors are debating whether to jump back into Chinese equities and chase the rally that has pushed it into a bull market, defying bearish assumptions about the world’s second-largest economy.

The MSCI China Index has jumped 6 per cent already this month, extending its advance from the January lows to 27 per cent and surpassing the rallies in Korea, India and Japan. It has also beaten the S&P 500 to become one of the best-performing sharemarkets this year.