China's stock market has missed the global artificial intelligence rally in 2026, with the CSI 300 index down nearly 6% this year while South Korea's Kospi and Taiwan's Weighted Index gained more than 65%, according to Yardeni Research. Yardeni attributed the underperformance to three factors: a Chinese economy weighed down by weak consumption, deflation, youth unemployment and a property downturn now in its fifth year; major Chinese equity benchmarks' lack of the AI hardware manufacturers that drive regional markets, since South Korea and Taiwan benefit from Samsung Electronics, SK Hynix and TSMC while China's strengths lie mainly in AI models and applications with domestic hardware companies trading outside major benchmarks; and regulatory uncertainty following Beijing's technology crackdowns, including its intervention in Alibaba affiliate Ant Group's planned listing. The firm also cited US-China tensions and potential American restrictions on advanced chip exports and investment, and noted the MSCI China index's forward price-to-earnings ratio has declined to 10.2 from 11.7 in mid-May. The weakness persists even after onshore-listed companies reported nearly 26% profit growth in the second quarter, their strongest quarterly increase in five years. Yardeni further warned that China's dependence on AI-related exports poses another risk, with Nomura estimating semiconductors, computers and related products account for roughly half of China's export growth, meaning a slowdown in global AI spending could hurt China's economy even though its broader stock market has missed the rally elsewhere in Asia.
Samsung Electronics Co Ltd
Alibaba Group Holding Ltd
Astera Labs, Inc.
NVIDIA Corporation
SK Hynix Inc
Taiwan Semiconductor Manufacturing Co. Ltd.
