The Star 50 index, representing Shanghai tech and innovation stocks, has declined by nearly 40% in 2026, marking it as the worst-performing major tech index globally. Meanwhile, the Shenzhen-based ChiNext index has fallen by 36% during the same period.
Individual domestic companies have faced significant losses this year. Chip designer MetaX has seen its value drop by approximately 50%, while Moore Threads shares have declined by about 25%. Additionally, SenseTime is down 40%, and the video platform Kuaishou has fallen by 51%.
In contrast, Chinese tech firms with significant overseas revenue exposure have performed well. A Bloomberg gauge tracking 30 such companies recorded a 36% gain in 2026, significantly outperforming domestically focused peers, which saw a growth of only 9%.
Optical transceiver manufacturers illustrate this trend, with some companies reporting that 90–96% of their revenue originated from overseas markets earlier in 2026. These firms benefit from global data center infrastructure spending rather than local market conditions.
The divergence stems from intense domestic competition and the withdrawal of foreign capital from A-shares. While early 2026 saw high expectations for China's role in the global AI market, current trends suggest a split in the sector based on revenue geography.
