China’s AI boom fails to lift stock markets from bear market

China's stock markets have entered a bear market despite the country's AI-driven economic growth, with key indexes falling over 20% since June. Beijing injected $19 billion into exchange-traded funds last week, its largest intervention since early 2025, but analysts say it may not halt the decline. Weak consumer spending and concerns about an AI bubble burst are driving the selloff. The STAR50 index of Chinese AI and chip leaders has plunged over 40% from its June peak, while shares in robot maker Unitree and memory chipmaker CXMT have also fallen sharply. Hong Kong's Hang Seng index has dropped over 12% this year. Analysts note that interventions are short-lived without policies addressing underlying issues like excess capacity and lack of fiscal spending. Strict capital controls limit global spillover, but stagnant consumption and a prolonged housing downturn continue to pressure household wealth, with about 70% tied up in property.