Even if China's GDP is understated, its growth is slowing; many economist agree it is slowing more than the Chinese government is letting us see...The Chinese central banking authority is essentially doing quantitative easing, or is on the precipice of it...that is not signs of a healthy economy my friend. China currently greatly resembles Japan in the early 90s imo.

Besides, in the end, even assuming you are completely correct, their stock market it completely decoupled from their economic situation. Even if their economy was growing 10%+, the valuation (F P/E & P/E) is extremely exaggerated.