Economy / Markets
China's AI stock rally comes apart, $480bn lighter
China's AI trade has turned. The STAR50 index of chip and AI names is down about 40% in less than four months, erasing roughly $480bn in market value, while the CSI 300 has fallen about 20% from its June peak and entered a bear market. Traders cite stretched valuations, tax bills and the risk that Washington bars Chinese data-centre equipment. AI stocks account for 42% of Chinese market capitalisation and 57% of turnover, and the STAR50 still trades near 100 times earnings against about 30 for the Nasdaq 100.