On Friday, the Shanghai Composite Index experienced a decline of 0.25%, closing at 3,996, while the Shenzhen Component dropped by 0.36% to settle at 13,404. This downturn marked the end of a two-day rally for mainland Chinese stocks. The slump was largely attributed to an unexpected 1.1% decrease in China's October exports, coupled with a significant slowdown in import growth to just 1%. The decline in export figures can partly be traced back to a high base effect, as companies had accelerated their shipments in anticipation of the Xi-Trump meeting in the previous month. Investors are now keenly awaiting key inflation data due over the weekend, seeking insights into the trajectory of the economic recovery.
Chinese stocks also reflected a global market downturn, spurred by renewed anxiety surrounding the high valuations of AI-related entities. Noteworthy declines were observed in companies such as Foxconn Industrial, which fell 4.6%, Zhongji Innolight, down by 1.4%, Zhejiang Sanhua, which decreased by 3.9%, Eoptolink Technology, declining 1.9%, and Cambricon Technologies, which dropped by 3.2%.
Concurrently, Chinese authorities have reiterated that new data center initiatives backed by state funding are required to exclusively utilize AI chips produced domestically. This mandate highlights Beijing's ongoing agenda to achieve technological self-reliance.
