Slowing growth notwithstanding, some investors are turning bullish on China, as measured by the rising tide of call options that were traded in June, according to AlphaShares, the firm that designs indexes focused on the world’s second-biggest economy.

The number of call options traded on the iShares FTSE China 25 Index Fund (NYSEArca: FXI) jumped to 1,577,069 in June, the most since 2,121,456 traded in December 2007, Walnut Creek, Calif.-based AlphaShares said in a press release.

Moreover, the balance between put and call is shifting in a bullish direction, the firm said, noting that the monthly put/call ratio averaged 1.34 for the first five months of the year and dropped to 0.59 in June. The latter number means that for every put contract traded in June, 1.69 calls changed hands.

It’s probably sensible to think about taking with a grain of salt much of what AlphaShares says about China, since its business plan rests on the continuation of China’s meteoric rise over the past 30 years.

But then again, AlphaShares’ enthusiasm comes days after China’s central bank cut official borrowing rates by 25 basis points—a move that caught many investors by surprise and was the latest sign that Chinese policymakers are willing to set aside their fight to keep a lid on inflationary pressures in the name of revving up the economy.

In any case, investors have been increasingly fretting about a slowdown in the Middle Kingdom. Growth there eased to 8.1 percent in the first quarter, and analysts expect the annualized rate to come in at 7.5 percent in the second quarter, according to the Wall Street Journal. The country has been growing at an annualized rate of 10 percent since 2000 and, increasingly, is becoming a barometer for global growth.

“Whereas ‘Don’t fight the Fed’ is a popular investment adage in the U.S., ‘Heed to the Premiere’ is becoming a directional trade in the Chinese equity markets,” Jonathan Masse, portfolio manager at Baochuan Capital and a member of AlphaShares’ index committee, said in the release, referring to Chinese Prime Minister Wen Jiabao.

Chinese GDP Report A Big Deal

That first snapshot of second-quarter growth is due for release this Friday, July 13, and will undoubtedly be one the biggest events in financial markets for some time.

A strong number above expectations would almost certainly validate the bullishness that AlphaShares is spying in the FXI options how’s evmarket.

Masse also said Chinese officials are clearly signaling that they intend to spur growth, and then follow through—a consistency of message and action that isn’t terribly common elsewhere in the world.

“For the month of June, options traders took great notice as fears were much relieved,” he said.

On the flip side, a second-quarter growth number at or below expectations is sure to add a ton of worries to investors increasingly traumatized by the prolonged period of uncertainty and volatility since the market meltdown of 2008-2009.

Declining Volatility

The indexing firm also noted that its very own AlphaShares Chinese Volatility Index (ASCNCHIX) ended June at 21.76 after hitting a six-month high of 31.10 on June 4. It fell by more than a fifth in June and by more than 17 percent year-to-date.

That decline paralleled falling volatility of the CBOE S&P 500 Volatility Index, or VIX, in June. The VIX fell by more than a third last month, ending June at 17.08, when the S&P 500 Index rose almost 4 percent, AlphaShares said.