China Stocks Hit Decade High as AI and Space Shares Fuel Rally
China’s stock markets surged to their highest level in a decade on Monday, lifted by strong performances in artificial intelligence and commercial space sectors. Investors welcomed a robust start to the trading year, pushing both onshore and Hong Kong shares higher.
Mainland Markets Extend Gains
The blue-chip CSI300 Index rose 0.4% by midday, while the Shanghai Composite Index climbed 0.8%, reaching its strongest level since July 2015. The gains followed a 3.8% rise last week, marking the market’s best weekly performance in 14 months.
In Hong Kong, the benchmark Hang Seng Index advanced 0.9%, continuing the positive momentum across the region.
AI and Space Stocks Lead the Charge
China’s commercial space sector saw a notable rally, with China Spacesat hitting its 10% daily trading limit to reach a record high. The surge came after an International Telecommunication Union (ITU) filing revealed that China had applied between December 25 and 31, 2025, for frequency and orbital resources to support 203,000 satellites spread across 14 constellations.
Technology shares also climbed sharply. The CSI Cloud Computing and Big Data Index jumped 6.8%, while AI-related shares gained nearly 4%. In Hong Kong, major tech stocks rose 2.1%, reflecting renewed investor confidence in China’s innovation-driven sectors.
Leading AI researchers said over the weekend that China’s growing appetite for innovation and risk-taking could help narrow the country’s technological gap with the United States. However, they warned that limited access to advanced chipmaking equipment continues to constrain progress.
Broader Market Movements
Beyond technology, other sectors also posted gains. The CSI Rare Earth Index added 3% after a senior U.S. official announced that Treasury Secretary Scott Bessent would encourage Group of Seven nations to reduce reliance on critical minerals from China. The CSI Defence Index climbed 5%, nearing a four-year high, as investors bet on increased spending in the sector.
By contrast, auto shares remained flat both onshore and offshore. China’s car sales are projected to stay unchanged this year, extending a downward trend, according to a local industry association.
with inputs from Reuters
