Chinese stocks lose $2.4 trillion since May peak as CSI 300 enters bear market
Key Facts
Chinese stocks have lost about $2.4 trillion in market value since their May peak, and the CSI 300 entered a bear market after falling 20% from its June high, Bloomberg reported on October 22, 2026. The index closed down 1.8% on Thursday, bringing its losses from its June peak to that level. The decline puts the Chinese market in a broad correction after a rally, with pressure also spreading to artificial intelligence and chip stocks. By October 26, the STAR50 index, which includes prominent artificial intelligence and semiconductor companies, had fallen 40% in less than four months. Reuters said the decline wiped about $480 billion from the index’s market value.
The share of artificial intelligence stocks in the market highlights why the sector’s decline has had such a broad impact. Goldman Sachs estimated that they account for 42% of market capitalization and 57% of trading across mainland-listed A-shares and Hong Kong-listed H-shares, Reuters reported on October 26. The estimate covers both markets, not mainland Chinese stocks alone. With that share, the sector’s decline affects a broad swath of traded value across the two markets. In an account reported by Reuters, fund manager Dong Baozhen described the market’s trajectory, saying: "The stock market later turned into a wild speculative rally." He added: "We are now seeing the bubble burst."
Correction losses were also seen in individual companies tied to artificial intelligence and chips. Unitree shares have fallen by half since trading began in August 2026, while retail investor demand exceeded the offering by 8,000 times at listing, Reuters reported. These figures describe two different stages: strong demand at listing, followed by a decline to half the level at which trading began; the report did not specify a date for measuring that fall. Chipmaker CXMT also lost more than a quarter of its value in the month before Reuters’ report on October 26. These moves show that STAR50’s losses came alongside sharp declines in individual company shares, as well as a drop in the broader CSI 300.
The share-market decline came as China’s economy recorded annual growth of 4.6% in the first three quarters of 2026, according to the National Bureau of Statistics. In the third quarter alone, gross domestic product grew 4.5% from the same period a year earlier and rose 1.2% quarter on quarter. Industrial profit data published on October 28 showed that profits at major industrial companies rose 15.5% to 6,033.74 billion yuan in January–September. Over the same period, profits in computer, communications and other electronic equipment manufacturing rose 103.8%, while profits in the automobile industry fell 22.8%. These figures present a mixed picture across industrial sectors, alongside losses in technology and chip stocks.
The official manufacturing purchasing managers’ index stood at 50.1% in September, up 0.3 percentage points from August and entering expansion territory, according to the National Bureau of Statistics. The new orders index was 50.5, above the expansion threshold, while the employment index stood at 48.4. The readings show divergence within the month’s manufacturing data, with new orders remaining above the expansion threshold and the employment index below it. In trading on October 27, the Hang Seng Index fell 0.2% and the Shanghai Composite Index declined 0.1%, according to the Associated Press. The National Bureau of Statistics is scheduled to publish the next monthly purchasing managers’ index reading on October 31 at 9:30 local time, the next reading for the industrial sector after September’s result.