China’s CSI 300 slips into bear-market territory as AI rout deepens
China’s CSI 300 slips into bear-market territory as AI rout deepens
China’s benchmark CSI 300 index fell into bear-market territory intraday on Thursday, dropping more than 20% from its June peak as a prolonged selloff in technology stocks deepened amid concerns over AI valuations and corporate earnings.
The blue-chip index fell more than 1% during the session and was down 2.6% for the week, extending its losing streak to 10 consecutive weeks, according to LSEG data. The milestone marks its first bear market since the selloff triggered by the COVID-19 pandemic in 2020.
Chinese AI-linked stocks came under heavy selling, with Z.AI plunging 9.4%, MiniMax falling 6.9% and chipmaker SMIC dropping 6.1%. Elsewhere, NetEase slid 6.7%, Alibaba fell 6.1% and JD.com lost 4.6%, extending losses across China’s technology sector.
The selloff has hit China’s technology sector particularly hard as investors reassess whether heavy spending on artificial intelligence infrastructure will generate sufficient returns.
The SSE Star 50, which tracks technology-heavy mainland stocks, has lost nearly 40% over the current half-year, making it one of the world’s worst-performing major technology gauges. The ChiNext Index, which is also heavily exposed to hardware companies, has fallen 36%.
Major chipmakers MetaX Integrated Circuits Shanghai and Moore Threads Technology have each shed around half their value during the period. Memory-chip maker CXMT has declined 27% from its post-listing peak, while robotics company Yushu Technology has lost around half its value from an August high.
The downturn also reflects longstanding structural challenges in China’s economy, including excess industrial capacity, overinvestment, weak domestic consumption and the prolonged property-market slowdown.
Intense competition has squeezed corporate margins and weighed on profit growth, even in sectors where Chinese companies remain globally competitive, including electric-vehicle batteries.
A prolonged slump could therefore constrain funding for China’s technology ambitions and increase pressure on policymakers to accelerate financial-sector reforms or provide stronger market support.