Hang Seng Tech Index rise today.

Valuations have reached peak pessimism levels as the China markets search for the bottom. But at the same time are going from one big disappointment to another in terms of messaging from the government.

A strong economic stimulus appears elusive after President's speech last week, where he set a goal for China to become a financial superpower while emphasizing regulation over innovation.

Being fundamentally different from the Western model should not mean the exclusion of the role of the capital markets, particularly the stock market, in building wealth and becoming a financial superpower.

Remember that it's not only stock investors who participate in the markets but also companies that can tap alternative financing in exchange for giving up a share of their business to everyday Chinese investors.

Mutual funds can offer proper diversification, minimize risk, and maximize returns when all facets of the capital markets are functioning properly. That goes hand-in-hand with investor confidence in these markets - something that needs to be addressed both domestically and internationally.

There's news that a RMB 2 trillion ($278B) "rescue package" funded mainly by offshore SOE accounts could be in the works to support onshore (A-share) stocks. While it has yet to be confirmed, this is causing the surge in markets today. I welcome this development if true.