China Stocks Enter Bear Market As AI Shares Plunge

Chinese stocks have lost about 2.4 trillion dollars since May, but the main risk goes beyond investors’ portfolios. By dropping valuations and household confidence, the correction could deprive AI companies of the capital needed to compete with the United States. The CSI 300, which groups the main listed companies in mainland China, has fallen more than 20% since its June peak. It thus entered a bear market on October 22, while the STAR 50, more exposed to semiconductors and artificial intelligence , has lost 40% in less than four months. This drop erased nearly 480 billion dollars on the STAR 50 alone. It comes as Beijing seeks to mobilize national savings to finance chips, robots, data centers, and the AI models needed for its technological autonomy.

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