Chinese stocks enter bear market with $2.4 trillion lost since May peak

Chinese stocks have entered a bear market, with $2.4 trillion in market value lost since a May peak, driven by weak consumption and doubts over artificial intelligence profitability. The CSI 300 Index fell 1.8% on Thursday, down 20% from its June high, making Chinese equities among the world's worst performers. Major gauges for Chinese companies and tech firms in Hong Kong also plunged, with the Hang Seng Tech Index down 31% for the year. The decline reverses a late-2024 stimulus-driven rally boosted by AI bets, while policymakers' lack of a broad spending package and economic growth barely meeting targets have disappointed investors. Analysts warn the malaise may extend into next year without substantial policy changes, citing weak domestic demand, uncertainty over AI spending returns, and rising European and US bond yields. Chinese tech trades at a discount to global peers, but weak earnings growth could keep shares rangebound or lower.