Hamilton was one of the standout performers of a wet final qualifying segment on Friday afternoon, taking second behind McLaren's Lando Norris.
The seven-time world champion said his car "came alive" in the wet, but he's realistic about its potential if Saturday morning's sprint is held in dry conditions.
"It was pretty tricky conditions. Not a lot of grip for everyone, but so happy," he told F1 TV.
"As soon as I saw the rain coming, I was so happy because in the dry conditions, we are not quick enough.
"So, when the rain came I thought I would have a bit of a better opportunity and that's when it all came alive."
"If it is like that [in the sprint race], then we have a chance of being somewhere up there. If it's dry then naturally, the Ferraris and Red Bulls will come by. Maybe we can hold off some of the others."
Team boss Toto Wolff was more optimistic about Mercedes' chances on Saturday, but cautioned that because of the sprint format's single practice session, there was limited data available on China's pecking order.
"We should have the pace in the dry," he told Sky Sports F1. "I don't think we have the pace against the Red Bulls, but we do, I think, against the McLarens.
"Having said that, it's also we don't know. Because we have no data from FP1, it could be that they are much quicker too, or the other way around."
Mercedes struggled for pace both in the dry SQ1 segment and amid a late drizzle in SQ2, which saw George Russell eliminated in 11th.
"We know our car; in terms of generating grip, it's not an easy task," said Wolff. "We failed in Q1, Q2, then got it right in Q3.
"Obviously, the driving is most important in the wet. But I think it shows it's about tyre preparation.
"We did the right things on the final run; the tyres were in the sweet spot combined with a great drive. That made the time."
Russell said his final lap was compromised by being at the back of the queue coming out of pitlane, meaning it was tough to bring his tyre up to the right temperature.
"It wasn't easy at all, that one lap in Q2," he explained.
"We tried sending it as early as we could, and then obviously got stuck. I think 12 cars were ahead of us, just sat in the pit lane, so we had a loss of tyre temperature.
"And then it was close, one more tenth and you are four or five positions higher. It's just a shame to be on the bottom end of that, but we've got a chance to recover in the sprint race."
