- China has paused new stock listings to stabilize its markets after an AI-driven rally reversed, wiping about $480 billion from the STAR 50 index of chip and AI companies.
- Chinese retail investors face steep losses, and Beijing’s swap lines, buyback support and ETF buying have so far failed to halt the slide.
- The freeze also stalls a wave of tech IPOs Beijing had counted on to pull household savings into strategic industries.
Following a sharp fall in AI and chip stocks that has wiped about $480 billion off the STAR 50 index, China has reportedly stopped approving new share listings to calm its falling stock market.
Everyday investors who bought into the two-year rally are feeling the pain, and global markets are watching to see if U.S. tech could face the same pressure.
Why have China’s AI stocks crashed?
The STAR 50 is a Shanghai index of China’s homegrown chip and AI companies. It has lost about 40% since peaking in July, wiping out roughly $480 billion in market value. The wider CSI 300 index is down about 20% from its June high. It fell 8.5% in October alone, its worst month in more than ten years.
Due to the continuous decline, China has reportedly paused the approval of new share listings.
AI stocks make up 42% of China’s total market value and 57% of trading activity across mainland and Hong Kong exchanges. The STAR 50 still trades at about 100 times its companies’ yearly earnings, compared with about 30 times for the U.S. Nasdaq 100.
Shares of humanoid robot maker Unitree (SSE: 688836) jumped about 600% when they debuted in August and have since lost half their value. Memory chipmaker CXMT (SSE: 688825) listed in July and briefly became Shanghai’s most valuable stock. It has since lost close to a third of its value.
Central bank swap operations are being used to supply cash to the market, and 31 securities firms and fund managers asked for more than $15 billion. Regulators also cut the cost of borrowing for share buybacks and pushed big tech firms to buy back their own stock.
Earlier in October, the government put $19 billion into exchange-traded funds, its largest market intervention since early 2025. However, these steps have not worked.
Mainland shares rose on Monday on hopes of state support, then fell again on Tuesday. The Shanghai Composite lost 1% and the STAR 50 dropped 4%, while the CSI 300 ended little changed.
Analysts at 22V Research said the measures are meant to set a floor under prices, and they doubt officials will try to push for a big rebound.
Why is China stopping new share listings?
New listings had been a way for Beijing to move household savings into its tech push, but with prices falling, regulators want to avoid adding more shares to a weak market.
Hong Hao, chief investment officer at Lotus Asset Management in Hong Kong, said the sell-off will “put a stop for many of the companies trying to get themselves listed.”
Back in August 2023, the China Securities Regulatory Commission limited new share offerings to support the market. IPO volume then fell 70% from a year earlier, and only 42 companies priced deals in the following months.
Wu Qing, head of China’s securities regulator, has promised that authorities will “do everything possible to maintain the safety and stability of the capital market,” and will encourage eligible firms to step up share buybacks.
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FAQs
How much value has China's AI stock crash erased?
The STAR 50 index has fallen roughly 40% from its July peak, wiping out about $480 billion according to Reuters calculations, while the broader CSI 300 is down around 20% from its June high.
What is Beijing doing to support the market?
Authorities launched central bank swap operations that drew more than 100 billion yuan ($15 billion) in requests from 31 firms, lowered buyback financing costs, pushed technology companies to repurchase shares, and earlier put $19 billion into ETFs.
Has China frozen IPOs like this before?
Yes. After the CSRC curbed new offerings in August 2023 to support the stock market, IPO volume dropped 70% from a year earlier, with only 42 companies pricing deals in the months that followed, per the South China Morning Post.
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Hannah Collymore
Hannah is a writer and editor with nearly a decade of blog writing and event reporting experience in the crypto space. At Cryptopolitan, Hannah contributes to the news page, reporting and analyzing the latest developments in DeFi, RWA, crypto regulation, AI and frontier tech industries. She graduated from Arcadia university with a degree in Business Administration.
