Overview
- The STAR50 index has fallen roughly 40% since its July peak, wiping out about $480 billion of market value and dragging the broader CSI 300 into roughly a 20% decline from its June high.
- State-led funds have stepped in with heavy ETF buying, with inflows into nine actively traded funds reaching about 128.7 billion yuan last week as authorities try to steady prices.
- AI-related stocks had come to dominate the market, accounting for about 42% of China’s market capitalization and 57% of turnover, which made exits crowded and amplified price swings.
- Several high-profile names have plunged, with Unitree down about half since its August listing and chipmakers MetaX and Moore Threads roughly halving since July, while CXMT fell more than 25% in the past month.
- Regulators issued anti-bubble guidelines on Oct. 9 and officials now face added risks from possible export controls and looming tax changes that could deepen the sell-off and threaten tech fundraising and new listings.