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Why China is missing the big AI rally

China’s CSI 300 Index is down nearly 6% this year, while Korea and Taiwan’s indexes are both riding AI-fueled 65% gains

by William Pesek October 2, 2026October 5, 2026

China isn't enjoying an AI stock boom. Image: YouTube Screengrab

TOKYO – China gave global investors one of 2026’s biggest AI thrills. Yet the country that helped ignite excitement about artificial intelligence is home to one of the worst-performing major stock markets. While AI fever has propelled Seoul, Taipei and Tokyo higher, Chinese shares are stuck in reverse.

So what gives? Several forces, actually. Weak household demand, for one. Consumer spending continues to disappoint, weighing on the earnings potential of mainland internet companies, automakers, and retailers.