China is expected to deliver strong economic growth in 2021, thanks to an expanding domestic market as well as a larger room to maneuver macroeconomic policy, said Mike Shiao, Invesco's chief investment officer for Asia excluding Japan.

The consensus forecast is 8 percent GDP growth this year on a relatively lower base of 2020 that will likely see an estimated growth of about 2 percent, against 6 percent in 2019, Shiao said.

Still, 2 percent growth in 2020 represents a solid economic recovery in China when viewed against dismal scenarios in many other comparable economies.

Resilient corporate earnings are likely to help Chinese equities outperform this year, even as technology-related tensions with the United States linger, said Kevin Anderson, head of investments for Asia-Pacific at State Street Global Advisors, the world's third-largest asset manager. It has assets worth $3.15 trillion under its management.

Admittedly, the US government's actions to block US investments in certain Chinese stocks and other sanctions against Chinese companies may affect some sectors, which investors should be "selective around", Anderson said.

In December, the US government alleged that four Chinese companies are owned or controlled by the country's military. Market mavens interpreted the move as an attempt to prevent US investors from buying shares of the four Chinese companies.

"That, in our opinion, does not dent the need or the importance for investors to focus on Chinese equities (as a whole), going forward," Anderson said.

According to him, quantitative easing that has pushed up valuation of equities thus far may provide less support this year as policymakers gradually wean economies off stimulus. This will make earnings growth the major source of market returns.

"We think China deserves to be a focus for investors for that reason," he said, adding that this is particularly true for some domestic demand-oriented consumption stocks and growth companies that drive the nation's digitalization and technological self-reliance.

The annual Central Economic Work Conference, which was held in Beijing last month, charted the course of the economy for this year. It called for efforts to strengthen China's competitiveness in strategic scientific fields and technologies, improve industry and supply chains toward a more independent and controllable position, and expand domestic demand. The three factors have been identified as key economic tasks.

This found an echo in the Fifth Plenary Session of the 19th Central Committee of the Communist Party of China, which decided that the country will uphold the central role that innovation plays in modernizing the country and turn self-reliance in science and technology into a strategic pillar for national development in the 14th Five-Year Plan period (2021-25).

China's technology sector is set to benefit from the 14th Five-Year Plan that emphasizes innovation as the core of development, playing an increasing role of import substitution through manufacturing upgrades, Paolini from Pictet said.

He also said multiple uncertainties, ranging from the possibility of the US government escalating sanctions to impact of domestic antitrust policy moves, may weigh on investor sentiment toward Chinese technology shares.

Over the medium to long term, however, a positive outlook on tech shares is intact as the country makes more efforts to sharpen its technological capability while digitalization accelerates partly due to the COVID-19 pandemic, he said.

The accelerated growth of 5G rollout, artificial intelligence, and the internet of things is going to be an important driver of new business models that will dominate people's lifestyle, Paolini said.

"On those areas, China has a natural advantage from the sheer size of its domestic market as well as the engineer dividend with 9 million new college graduates per year," he said.