Many investors say that stocks of drugmakers and medical equipment companies, however, will likely get a more lasting lift from China's bumpy journey towards an eventual economic opening.

China's stocks and currency have jumped and global banks have turned more bullish on its prospects, as Beijing moved towards a more targeted zero-COVID policy while reducing virus testing and quarantines, after it was confronted by widespread anti-lockdown protests.

Zhang Kexing, general manager of Beijing Gelei Asset Management, said he has made big bets on duty-free shopping, home furnishing, and food and beverage stocks that will benefit from easier COVID rules, but some are merely short-term wagers.

"If other economies offer any guide, the consumption recovery is likely to disappoint in the short term after an economic reopening," Zhang said, adding that much of the expected revival has been priced in.

Investors have snapped up Chinese tourism, leisure, retailing and food and beverage stocks over the past week.

A study by Chang Jiang Securities on the correlation between economic growth and COVID-related policies in Asian economies concluded that relaxing COVID rules does not lead to a sustainable recovery in consumption.

A possible jump in infections - and deaths - could curtail social activity and hurt retailers, according to the study, based on data from Singapore, South Korea, Indonesia, Vietnam, Thailand, Hong Kong and Taiwan.

"After curbs are relaxed, China could experience the impact from surging virus cases, along with rising deaths, potentially hitting the economy," the brokerage said.

Christopher Beddor, deputy China research director at Gavekal Dragonomics, said production could also be affected.

"I think it's reasonable to think that as infections rise, they're going to have shortages in some areas of workers," he said.

Grow Investment Group chief economist Hong Hao, warning of confusion and chaotic expectations ahead, recommended internet platform companies and food delivery firms in the short term.

"Intuitively, as cases soar, people will choose to stay home to minimise the contagion risks," he said.

Yin Peixin, investment manager at Shanghai Jianlong Asset Management Co, expected a wave of panic about the pandemic during the Lunar New Year holiday in late January, when many Chinese will be travelling.

Rising infections would benefit drugmakers and producers of medical equipment, he said, but he advised against holding shares in makers of nucleic acid tests used by the authorities, as testing requirements ease.

"Domestic demand and prices will go down," he said.

Sinolink Securities recommends companies that make home-use antigen tests, such as Guangzhou Echom SCI & Tech Co and Sino Biological Inc, since these may instead be in greater demand if infections rise.

(Reporting by Jason Xue and Summer Zhen; Writing by Samuel Shen; Editing by Vidya Ranganathan and Edmund Klamann)

By Jason Xue and Summer Zhen