The government has fired up investors by encouraging banks to lend more to buyers of stock and real estate, but economists say more stimulus is needed.

China's stock rally could extend another 15% to 20%, Goldman Sachs says. China's equity indexes have jumped dramatically since Beijing announced major stimulus policies. Goldman highlighted still low valuations and diminishing risk as tailwinds for a continued rally.

The world-beating rally in Chinese stocks is failing to convince many global fund managers and strategists.Most Read from BloombergSingapore Ends 181 Years of Horse Racing to Make Way for HomesFrom Cleveland to Chicago,

Investor sentiment has been boosted by Beijing’s recent package of stimulus measures across multiple policy fronts.