While many local investors have backed away from China's stock markets during the downturn, an increasing amount of foreign capital has been taking advantage of the lower stock prices. The share of the market held by foreign investors has surged this year to hit six percent, and is expected to rise even further in the next few months.

Foreign investors now hold nearly as much of the A-share market as Chinese insurance companies. In the near future, it is possible that they will equal the amount held by public funds. 

Foreign capital arriving through the Mainland-Hong Kong Stock Connect has reached more than 20 billion yuan (about three billion US dollars) so far this year. 

"Two particular sectors stand out as preferred sectors by foreign investors. They are consumer and technology," said Theodore Shou, chief investment officer of Skybound Capital. 

Home appliance makers Gree and Midea, as well as liquor maker Wuliangye, are the top three in terms of sales volume on the Shenzhen-Hong Kong Stock Connect. 

A-shares are getting more international exposure from other sources too. Early this month, MSCI added another 10 Chinese stocks to its Emerging Markets Index, giving Chinese A-shares a weighting of five percent. 

In addition, the Shanghai-London Stock Connect is expected to officially open by the end of this year, creating yet another avenue for foreign investors. 

"I think foreign investors' entry gives an example for domestic investors to study, because the A-share market already has ample capital. As foreign capital coming to the stock market, domestic investors could look at their asset allocation logic and investment targets. It tells domestic individual and institutional investors how foreign investors invest," mentioned Yang Zhongning, investment consultant for Industrial Securities.