# China’s STAR50 Sheds More Than 40% as AI Selloff Tests Market Plans

By Enna Lee

Canonical URL: https://www.tokenpost.com/news/investing/41614
Published: 2026-10-27T09:10:28.000Z
Updated: 2026-10-27T09:10:28.000Z
Section: Investing

> The decline has erased more than $480 billion in market value, while the index’s price-to-earnings ratio remains near 100.

China’s STAR50 has lost more than 40% in less than four months, wiping out more than $480 billion in market value and testing Beijing’s effort to channel investment toward technology companies.

The STAR50 focuses on Chinese AI and semiconductor leaders.

The CSI 300, a benchmark for China’s blue-chip stocks, is about 20% below its June high. That decline has interrupted a rally of roughly two years that was driven in part by expectations for economic stimulus. By comparison, the Nasdaq index has fallen about 6% from a record high reached three weeks earlier.

Valuations remain elevated despite the selloff. The STAR50’s price-to-earnings ratio is near 100, down from a peak close to 250. The Nasdaq 100 trades at about 30 times earnings. Concerns over high share prices, tax pressure and possible bans by the United States or other countries on Chinese equipment in data centers have weighed on sentiment.

Individual stocks have also fallen sharply. Shares of 宇樹科技 were about half their level at the company’s August listing. 長鑫存儲 (CXMT) fell more than 25% over the past month. Two optical component makers, 中際旭創 (300308.SZ) and 新易盛 (300502.SZ), each dropped about 60% from peaks in June or July amid concern over possible restrictions on supplying U.S. data centers.

Beijing has sought to temper boom-and-bust swings and build a steadier stock market that can help finance technology companies. Its policy efforts have included curbing leverage and high-frequency trading, while state-backed funds have sold shares during rallies to limit gains.

Beijing fund manager Dong Baozhen described China’s AI stock market as a speculative bull market and said a bubble was bursting. Hong Hao of Lotus Asset Management expects many companies waiting to go public to pause their listing plans.