SHANGHAI, 24 October 2025 – Shanghai’s equity markets climbed to their highest levels in a decade on Friday, buoyed by strong gains in semiconductor and artificial intelligence shares amid renewed optimism over China’s tech-policy direction. The ascent signals investors’ growing conviction in the domestic technology push and reflects broader sentiment that Beijing may be easing into a more pro-growth stance.
The Shanghai Composite Index advanced about 0.4% by mid-day, marking its best levels since August 2015. Meanwhile the blue-chip CSI 300 Index rose roughly 0.7% and appeared on track for its strongest week in two months.
Drivers of the move
- Market sentiment was lifted after Beijing pledged to “resolutely” meet this year’s economic targets and signalled support for the technology sector, a tailwind for chip- and AI-hardware companies.
- Specific strength in chip- and AI-related stocks, where companies developing domestic semiconductors and computing infrastructure are capturing investor attention amid rising global tech-tensions and China’s self-reliance ambitions.
- Optimism over a potential easing of U.S.–China trade and technology tensions, including expectations of upcoming high-level talks, also helped lift the broader market.
What this means for Asia & regional investors
For the wider Asia-Pacific region, China’s rally offers both opportunity and caution:
- Opportunity: As China’s tech policy gains momentum, regional supply-chain players, chip-components firms and service providers may benefit from increased demand and investment flows.
- Caution: Chinese markets are increasingly tied to policy direction. A shift in tone, regulatory surprise, or external shock (e.g., export controls) could prompt sharp reversals. The fast pace of recent gains also raises valuation-risk concerns.
- Spill-over potential: A strong Chinese technology rally can boost sentiment across Asian equity markets, particularly in economies with tech-value-chain linkages, but exposure to China-specific risks may also increase.
Looking ahead
Key risks to watch include:
- Whether China’s policy pronouncements translate into meaningful action (e.g., infrastructure spending, tech subsidies) or are more rhetorical.
- The possibility of renewed trade or technology restrictions from the U.S., which could dampen investor sentiment and chip-hardware demand.
- Valuation stretch: with some tech shares advancing rapidly, the risk of correction is heightened if earnings disappoint or macro conditions deteriorate.
