An investor protection firm owned by the Chinese government has announced that a survey conducted in September indicates that investors are once again upbeat about China's stock market. But some foreign financial market observers are not that confident.

The government funded survey revealed that investor confidence index rose to more than 51 points in September against a measly 24 points in August. This indicates that more investors are returning to the market.

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In June, China's stock market started a downward spiral as investors scrambled to get rid of their shares. This resulted in a decline on the Shanghai stock index by almost 40 percent from its June 2015 peak.

The Chinese government launched a series of campaigns in a bid to reverse or at least arrest the decline. Among other measures, initial public offerings were temporarily halted, state owned firms were "encouraged" to buy back their shares and market regulators set up a number of rules that were designed to help prevent further losses in the value of stocks.

Regulators have also launched a number of investigations in order to flush out alleged stock price manipulators. Several people - including a reporter and a senior market securities regulator - were punished under the new rules covering securities.

The survey concluded that these measures by the authorities has encouraged investors to come back to the Chinese stock market.

However, a number of financial analysts believe that the Chinese stock market will continue to face some rough sailings in the near future. They point out that the British Standard Chartered Bank is making plans to lay off a thousand of its managers, and thousands more from the company's rank and file are certain to follow. While the bank's head office is located in the United Kingdom, a majority of its income comes from China and other parts of Asia.

Standard Chartered's substantial lay off reflects the gloomy outlook of various international financial institutions with regards to Asia and in particular, China.

Many financial analysts outside of China still believe that a lot of Chinese stocks are priced way above their true value. Foreign investors are allegedly waiting for the stocks to bottom-out further before they may consider investing again in Chinese stocks.

TagsChinese Stocks, China stock market, Shanghai Composite Index, chinese investor protection fund